Sirisha Naidu (Associate Professor, Department of Economics, Wright State University)
Cartoons – Rebel Politik (https://rebelpolitikblog.com/)
এই লেখাটি বাংলায় পড়ার জন্য এখানে ক্লিক করুন।
This is the first of a series of short articles on Economics with an intention to demystify various basic terms and concepts related to Economics that we encounter everyday in news papers and other media forums as well as our conversations. And yet, these terms and concepts may not have been entirely clear to some of us. This, on a macro level, allows a leeway to governments and the corporate sector to mislead us into believing wrong information regarding development and our own socio-economic welfare. Dear reader, we will be happy to receive your feedback against this series.
The Modi government has ostensibly won the support of a large proportion of the Indian population on its promise to increase India’s economic growth. This promise, however, is not unique to the current government, but has featured in the top priorities of many governments at least since the 1990s. But how do we understand economic growth?
What is economic growth? What does it measure?
In order to understand economic growth, we must first grasp the concept of GDP (gross national product), which quantifies the level of economic activity in any nation. In India, the Central Statistical Organisation (CSO) estimates GDP. Specifically, GDP attempts to measure the rupee value of economic activity measured in terms of goods and services produced for the final consumer in a particular year, which means multiplying the price of a particular final good or service in a particular year and multiplying it by the quantity in the same year and summing this value across all final goods and services. This gives us what is known as nominal GDP. Calculating the rupee value of economic activity for the ‘final consumer’ eliminates the problem of double counting.