Information related to GDP, its calculation and how to raise GDP in India.

1. Economic Environment of Business
Term Paper Presentation
on
GDP –its equation, how to raise GDP in India?.
Presented By:
Navneet Vijaywargi(131207)
A.Avinash(131248)
K.Anusha(131249)
Ch. Aditya(131209)
K.Anusha(131208)

2. Gross domestic product (GDP) is the market value of
all officially recognized final goods and services
produced within a country in a given period of time.
It does not include the incomes of NRI’s.
In simple terms GDP is the national income of a
country in a given period of time.
Gross Domestic Product (GDP)

3. Measurement of GDP:
Expenditure approach:
The following is the approach to arrive at the GDP:
◦ Take consumption expenditure in various goods and
services-(C)
◦ Add investments by people in various avenues such as
equity, Fixed Deposits etc.-(I)
◦ Add government expenditure in infrastructure
development, defense etc.-(G)
◦ Add the excess of exports over imports.-(X-M)
The resultant figure is the GDP of the country.

4. Measurement of GDP (contd.)
Income approach/ Factor income
method:
In this method, incomes such as business profits,
salaries, rent, corporate profits, taxes, interest etc.
are added to arrive at the National GDP.
Value added approach:
In this method the value added to a particular
product at every stage of its production is added to
arrive at the value added to that product.
Then the value added by all the firms in an
economy is added to arrive at the GDP.

5. Methods of calculating GDP (contd.)
Nominal GDP: It measures the value of all
commodities/services in an economy at current
prices.
Real GDP: It measures the value of all
commodities/services in an economy at constant
prices of some base year.
Real GDP=Nominal GDP/GDP Deflator.
GP Deflator=GDP at current prices/GDP at
constant prices.

6. Equation of GDP:
• The equation of GDP is:
GDP = C + I + G + (X-M)
where,
• Consumption (C) - Includes personal consumption
goods.
• Investment (I) - Includes Gross Private Investments
such as Fixed Deposits etc.

7. Equation of GDP (contd.) :
Government Purchases (G) - This category
includes government spending various items.
Net Exports (X-M)- This is calculated by
subtracting a nations imports (M)from exports
(X).

10. Methods to increase GDP:
Increase Private Public Partnership in sectors
like mining, transport, power etc.
Infrastructure development to attract FDI in
India.
Provide funding and subsidies to startups
companies.
Encourage research activities by educational
institutions.
Maintain balance between exports and imports.

11. Methods to increase GDP (contd.)
Govt. should frame transparent policies for
doing business in India.
Govt. should create more jobs.
Import of non-essential goods must be reduced.
Create awareness among people about
investment options available to them.
Encourage MSME sectors by granting low
interest loans.

12. CONCLUSION:
By implementing the above mentioned
measures the GDP in India can be
improved to a major extent.