The decling Gross Domestic Product makes for good headlines. If you really want to understand what the GDP is all about, check this out along with some interesting tidbits.. An article by Fundsupermart.com

1. All about GDP
The decling Gross Domestic Product makes for good headlines. If you really want to understand
what the GDP is all about, check this out along with some interesting tidbits
Author : iFast Content
A Reuters poll has suggested that annual economic growth is expected to have slowed to
5% in the three months to December, having already struck a near 3-year low of 5.3%.
While much is being made of the slowdown in GDP, do you really know what it is?
Gross domestic product (GDP) is the measure of the output of goods and services in an
economy. That is the simple way to put it. In reality, it measures the sum total of "value-
added". The reason being to avoid the double counting that would inevitably be part of a
process of simply adding up the value of all output. For instance, if we were to add the
value of output of all auto component manufacturers and the value of output of all
carmakers, we would have counted car components twice. By looking only at value-
added, GDP measurements prevent this double counting from happening.
So it’s safe to say that GDP measures the value of final goods and services produced in a
country in a given period of time. It counts all of the output generated within the
borders of a country.
GDP = C + I + G + (X-M)
GDP = Private consumption + Gross investment + Government spending + (exports-
imports)
Here are some interesting bits of news with regards to GDP which you might have not
known:
 India became a trillion-dollar economy in 2007. To make global comparisons easier, an
economy’s GDP is measured in the local currency and converted into dollars at the
prevailing exchange rate. Economist Ajit Ranade had something interesting to say in
Mumbai Mirror which is reproduced briefly here. "When India was a $1 trillion
economy, the GDP growth rate was 9%. This was the growth rate achieved during 2003
to 2007. Since 2008, partly due to a global financial crisis, India’s growth has gone down
steadily. Simple math tells us that an economy of size $1 trillion growing at 9% is the
same as 4.5% growth for an economy twice the size. As the base grows larger and larger,
in percentage, the addition of the same amount of ‘real’ growth means lower and lower
growth rate. And we are growing at 5.5%, which is more than 4.5%”.

2.  Rise in electronic payments such as credit and debit cards and other mode of paperless
transactions have added around $1.5 billion to India’s GDP during 2008-12 period,
according to a Visa-Moody's Analytics study.
Globally, increased electronic payments added $983 billion to the GDP of 56 countries
during this period. India lags behind other emerging nations like China, Brazil and
Russia among others in e-payments as the third largest Asian economy is still cash-
driven. While China witnessed an addition of $375 billion due to the increased card
usage during 2008-12, it was $51 billion for Brazil and $36 billion for Russia.
 According to a blogger at Wall Street Journal, the internet’s potential contribution to
India’s GDP by 2015 may leap to $100 billion, from about $30 billion in 2011. This was
apparently the conclusion of a study by global consulting firm McKinsey & Co. The
report said that 28% of India’s population is set to have internet access by 2015, up from
10% currently. But here’s what’s most interesting, most people who access the internet in
India by 2015 will do so on mobile device such as cellular phones or tablet computers.
The report states that three out of four users will be mobile-only users. An increase in
internet users could create 22 million jobs by 2015 from about 6 million now.
 The National Institute of Public Finance and Policy (NIPFP) conducted a study in the
last week of December 2012 to quantify the black money being generated in India. It has
been estimated that unlawful wealth exceeds 10% or more of GDP- translating into more
than Rs 10 lakh crore. While in percentage terms, the figure has declined, in actual
rupees it has risen when compared with its earlier studies.
o 1975-76: 15-18% of GDP- Rs 9,958-1,1870 crore
o 1980-81: 18-21% of GDP – Rs 20,362-23,678 crore
o 1983-84: 19-21% of GDP – Rs 31,584-36,784 crore
Also Read “Budget terms you must know”
Content Team,
Fundsupermart.com | iFAST Financial India Pvt Ltd.
DISCLAIMER
iFAST and/or its content and research team’s licensed representatives may own or have positions in the mutual funds of any
of the Asset Management Company mentioned or referred to in the article, and may from time to time add or dispose of, or be
materially interested in any such. This article is not to be construed as an offer or solicitation for the subscription, purchase or
sale of any mutual fund. No investment decision should be taken without first viewing a mutual fund's scheme information
document including statement of additional information. Any advice herein is made on a general basis and does not take into
account the specific investment objectives of the specific person or group of persons. Investors should seek for professional
investment, tax, and legal advice before making an investment or any other decision. Past performance and any forecast is not
necessarily indicative of the future or likely performance of the mutual fund. The value of mutual funds and the income from
them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please read our disclaimer on
the website .Please read our disclaimer in the website. Risk Factors: Mutual funds, like securities investments, are subject to
market risks and there is no guarantee against loss in the Scheme or that the Scheme’s objectives will be achieved. As with
any investment in securities, the NAV of the Units issued under the Scheme can go up or down depending on various factors
and forces affecting capital markets. Past performance of the Sponsor/the AMC/the Mutual Fund does not indicate the future
performance of the Scheme. The name of the Scheme does not in any manner indicate the quality of the Scheme, its future
prospects or returns. Please read the Statement of Additional Information and Scheme Information Document carefully before
investing.