Table of Contents
National Income Estimates
In News: The National Statistical Office (NSO), Ministry of Statistics and Programme Implementation has released Provisional Estimates (PE) of National Income, 2021-22.
Nominal GDP vs Real GDP
- Gross Domestic Product (GDP) is the final monetary value of the goods and services produced within the country during a specified period of time, normally a year.
- In simple terms, GDP is the measure of the country’s economic output in a year.
Nominal GDP is the value of all final goods and services that an economy produces during a given year; it is not adjusted for inflation.
It is calculated by using the prices that are current in the year in which the output is produced.
- Nominal GDP takes into account all of the changes that occurred for all goods and services produced during the year.
- If prices change from one period to the next and the output does not change, the nominal GDP would change even though the output remained constant.
- Real GDP, on the other hand, is the total value of all final goods and services that the economy produces during a given year, accounting for inflation. It is calculated using the prices of a selected base year.
- To calculate Real GDP, you must determine how much of GDP has been changed by inflation since the base year, and divide out the inflation each year.
- Real GDP, therefore, accounts for the fact that if prices change but output doesn’t, nominal GDP would change.
What is Gross Value Added (GVA)?
- In 2015, in the wake of a comprehensive review of its approach to GDP measurement, India opted to make major changes to its compilation of national accounts and bring the whole process into conformity with the United Nations System of National Accounts (SNA) of 2008.
- As per the SNA, gross value added, is defined as the value of output minus the value of intermediate consumption and is a measure of the contribution to GDP made by an individual producer, industry or sector.
- At its simplest it gives the rupee value of goods and services produced in the economy after deducting the cost of inputs and raw materials used. GVA can be described as the main entry on the income side of the nation’s accounting balance sheet, and from an economics perspective represents the supply side.
- While India had been measuring GVA earlier, it had done so using ‘factor cost’ and GDP at ‘factor cost’ was the main parameter for measuring the country’s overall economic output till the new methodology was adopted.
- In the new series, in which the base year was shifted to 2011-12 from the earlier 2004-05, GVA at basic prices became the primary measure of output across the economy’s various sectors and when added to net taxes on products amounts to the GDP.
Index Of Industrial Production
In News: India’s core sector output expanded 8.4% in April, the fastest pace in six months, with crude oil and steel the only sectors among the eight infrastructure industries comprising the index to record a marginal decline in production from the year-earlier period.
- The combined Index of Eight Core Industries stood at 143.2 in April 2022, which is an increased of 8.4 per cent (provisional) as compared to the Index of April 2021.
- The production of Coal, Electricity, Refinery Products, Fertilizers, Cement and Natural Gas industries increased in April 2022 over the corresponding period of last year.
- Department for Promotion of Industry and Internal Trade (DPIIT) releases Index of Eight Core Industries (ICI) every month.
- ICI measures combined and individual performance of production in selected eight core industries viz. Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement and Electricity. The Eight Core Industries comprise 40.27 percent of the weight of items included in the Index of Industrial Production (IIP).
- Base year is 2011-12.
All-India Consumer Price Index for Industrial Workers
In News: The All-India CPI-IW for April, 2022increased by 1.7 points and stood at 127.7 (one hundred twenty seven point seven).
- The Labour Bureau, an attached office of the M/o Labour & Employment, compiles Consumer Price Index for Industrial Workers every month on the basis of retail prices collected from 317 markets spread over 88 industrially important centres in the country.
- The index is compiled for 88 centres and All-India and is released on the last working day of succeeding month.