Indian GDP (Gross Domestic Product) Calculation and Analysis

INDIAN GROSS DOMESTIC PRODUCT (GDP) CALCULATION & ANALYSIS

2009

I N T E R N A T I O N A L S C H O O L O F B U S I N E S S & M E D I A ; K O L K A T A

ABHIJIT SAMANTA

Data taken up to March 2009. Source of Data: Business Beacon (CMIE, Centre for Monitoring Indian Economy)

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Required data is collected from CMIE Business Beacon. The calculation of GDP (Gross Domestic Product) is

done on two approaches

1. The Expenditure Approach.

2. Summed up gross domestic product from various sectors.

The required calculations are done on Microsoft Excel and then copied on MS Word. In representing the

growth, variations and the relationship with factors are represented on 2 dimensional graphs and analysis is

done.

The period used for GDP calculation is 1990-2009, last 20 years. In some of the calculations data up to 2008

is taken because of the non availability of 2009 data.

In this method first we find out various categories of final expenditure which are: -

1. Private Consumption Expenditure. (C )

2. Govt. final consumption expenditure. (G )

3. Expenditure on gross capital investment. (I )

4. Net export of goods and services. (N Ex)

Then we add up all the individual gross expenditure to find out the GDP (Gross Domestic Product).

Net export of goods and services = Export of goods and services – Import of goods and services.

The calculation is shown below.

GDP = C+ G + I + N Ex.

METHODOLOGY: -

GDP Calculation with expenditure

approach: -

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All at constant price

Year Private final Consumption Expenditure (C ) (Rs. Core)

Government final Consumption Expenditure (G ) (Rs. Core)

Gross Capital Investment (I ) (Rs. Core)

Net Exports of Good & Services (N Ex) (Rs. Core)

GDP = C+G+I+N Ex (Rs. Core)

Mar-90 786725 138219 244049 -3748 1165245

Mar-91 821863 142914 270707 1974 1237458

Mar-92 839593 142674 245108 10073 1237448

Mar-93 861245 147599 278074 -2746 1284172

Mar-94 898682 156360 270165 -8575 1316632

Mar-95 942359 158523 321731 -21015 1401598

Mar-96 999729 170895 382142 -22864 1529902

Mar-97 1077445 178825 344795 -8058 1593007

Mar-98 1109656 198947 396774 -36060 1669317

Mar-99 1181797 223204 407811 -55373 1757439

Mar-00 1253643 252744 509518 -38005 1977900

Mar-01 1293822 255087 485049 -5734 2028224

Mar-02 1373355 260879 502116 174 2136524

Mar-03 1409960 259960 554734 32771 2257425

Mar-04 1497146 266599 633105 7532 2404382

Mar-05 1574565 276125 781622 27679 2659991

Mar-06 1687118 293265 930738 -72090 2839031

Mar-07 1793691 309293 1060108 -108306 3054786

Mar-08 1945668 332033 1220412 -148012 3350101

Mar-09 2001488 399262 1322101 -209060 3513791

The year to year growth analysis of GDP (in next page) shows that in the last 20 years period maximum

growth in GDP occurred in 2000 with 12.54%. The minimum growth occurred in 1992 and there were no

negative growth in the last 20 years of period.

However a clearer picture of GDP year to year growth is given with the application of a chart on the next

page.

GDP GROWTH ANALYSIS: -

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Year Growth (%)

Mar-90 -

Mar-91 6.20

Mar-92 0.00

Mar-93 3.78

Mar-94 2.53

Mar-95 6.45

Mar-96 9.15

Mar-97 4.12

Mar-98 4.79

Mar-99 5.28

Mar-00 12.54

Mar-01 2.54

Mar-02 5.34

Mar-03 5.66

Mar-04 6.51

Mar-05 10.63

Mar-06 6.73

Mar-07 7.60

Mar-08 9.67

Mar-09 4.89

-2.00

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

GDP Growth (%)

Growth(%) -

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

Jan

/90

Jan

/91

Jan

/92

Jan

/93

Jan

/94

Jan

/95

Jan

/96

Jan

/97

Jan

/98

Jan

/99

Jan

/00

Jan

/01

Jan

/02

Jan

/03

Jan

/04

Jan

/05

Jan

/06

Jan

/07

Jan

/08

Jan

/09

GD

P

YEAR

GDP GROWTHoverall (exact figure)

GDP

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The above picture shows the proportion of various components in GDP. We can see that Private final

consumption expenditure contributes a maximum proportion in GDP almost 63% and Net export contributes

a very minimum portion.

In this approach we found out the final production of goods and services from various sectors and then we

sum up them to find out the GDP. The various sectors here are Agriculture, forestry, fishing, mining etc.

GDP = ∑ Production from all the sectors.

Here the calculated GDP can vary with the previous calculation. It the only because of non availability of

proper data covering all the sectors.

Proportions of various factors in GDP: -

0%

20%

40%

60%

80%

100%

% O

F G

DP

Proportion of various factors in GDPNet Exports of Good & Services (N Ex) (Rs. Crore)

Gross Capital Investment (I )(Rs. Crore)

Government final Consumption Expenditure (G )(Rs. Crore)

Private final Consumption Expenditure(C )(Rs. Crore)

GDP as summed up final production from

various sectors: -

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Year Agriculture

Forestry & logging

Fishing

Mining & quarrying

Manufacturing registered

Manufacturing unregistered

Electricity, gas & water supply

Construction

Trade, hotel, transport & comm.

Finance, insurance, real estate and business services

Social & personal services

GDP = ∑ of all sector

Mar-90

298720

16499

11554

26266 96057 58543 22082 59336 189043

107962

143119

1029181

Mar-91

311500

16280

12113

29014 101467 60512 23559 66330 198770

114670

149357

1083572

Mar-92

304301

16407

12549

29988 100189 57905 25843 67696 203897

127079

153219

1099073

Mar-93

325777

16023

13621

30264 102253 60726 27636 70053 215271

133999

162400

1158023

Mar-94

336136

15946

15149

30685 113746 63236 29710 70452 230141

148962

169654

1223817

Mar-95

352069

16370

16111

33535 128578 67555 32495 74243 252875

154751

173493

1302075

Mar-96

348626

16307

16943

35502 149064 77394 34704 78683 286232

167276

186244

1396975

Mar-97

384886

16553

18319

35699 165070 82904 36593 80158 309328

177627

201241

1508378

Mar-98

373446

16959

18634

39201 160760 87342 39417 88553 332580

198423

217948

1573263

Mar-99

400030

17159

17703

40309 166338 89534 42189 94109 358014

213902

239123

1678410

Mar-00

409660

17916

18939

41594 173003 91110 44526 102007 387514

233550

266707

1786526

Mar-01

407176

18399

19828

42589 186570 98001 45439 108362 415650

243048

279239

1864301

Mar-02

433475

18964

20810

43335 195107 96696 46228 112692 453847

260737

290715

1972606

Mar-03

398206

19090

21671

47168 209909 101776 48423 121650 496691

281550

302153

2048287

Mar-04

441360

18872

22444

48626 224919 107444 50735 136224 556370

297250

318514

2222758

Mar-05

441647

19276

21987

52591 245343 115772 54745 158212 615849

323080

340266

2388768

Mar-06

467984

19536

23594

55164 268100 125742 57513 183868 690399

359888

364313

2616101

Mar-07

487010

20005

24300

60038 299329 140864 60544 205543 778895

409472

385118

2871118

Mar-08

511274

20432

25416

61999 321985 154318 63730 226325 875398

457584

411256

3129717

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The growth in various sectors in put over graphs. And form the graphs the growth of different sectors can be

easily identified. However we have done a comparative analysis of growth in various sectors. That is

discussed later.

Mar-09

64244 65899 242577 954589

493356

464926

2285591

Growth in various sectors: -

0100000200000300000400000500000600000

Jan

/90

Jan

/92

Jan

/94

Jan

/96

Jan

/98

Jan

/00

Jan

/02

Jan

/04

Jan

/06

Jan

/08

Agricultural Sector

0

5000

10000

15000

20000

25000

Jan

/90

Jan

/92

Jan

/94

Jan

/96

Jan

/98

Jan

/00

Jan

/02

Jan

/04

Jan

/06

Jan

/08

Forestry & logging

05000

1000015000200002500030000

Jan

/90

Jan

/92

Jan

/94

Jan

/96

Jan

/98

Jan

/00

Jan

/02

Jan

/04

Jan

/06

Jan

/08

Fishing

0

20000

40000

60000

80000

Jan

/90

Jan

/92

Jan

/94

Jan

/96

Jan

/98

Jan

/00

Jan

/02

Jan

/04

Jan

/06

Jan

/08

Mining & quarrying

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0

100000

200000

300000

400000

Jan

/90

Jan

/92

Jan

/94

Jan

/96

Jan

/98

Jan

/00

Jan

/02

Jan

/04

Jan

/06

Jan

/08

Manufacturing (Registered & Unregistered)



0

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30000

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50000

60000

70000

Jan

/90

Jan

/92

Jan

/94

Jan

/96

Jan

/98

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/00

Jan

/02

Jan

/04

Jan

/06

Jan

/08


0

50000

100000

150000

200000

250000

300000

Jan

/90

Jan

/92

Jan

/94

Jan

/96

Jan

/98

Jan

/00

Jan

/02

Jan

/04

Jan

/06

Jan

/08

Construction

0200000400000600000800000

10000001200000


0

100000

200000

300000

400000

500000

600000

Jan

/90

Jan

/92

Jan

/94

Jan

/96

Jan

/98

Jan

/00

Jan

/02

Jan

/04

Jan

/06

Jan

/08

Finance, insurance, real estate and business services

0

100000

200000

300000

400000

500000


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In the previous section the growth of each individual sector was shown however it was not possible form

that section to understand the comparative growth of various sectors. This comparative growth of various

sectors is discussed here and are shown on graphical representation.

Sector Production 2008 (Rs. Core)

Production 1990 (Rs. Core)

Avg. Growth rate yearly (%)

Total growth (%)

Agriculture 511274 298720 3.74 71.15

Forestry & logging 20432 16499 1.25 23.84

Fishing 25416 11554 6.31 119.98

Mining & quarrying 61999 26266 7.16 136.04

Manufacturing registered 321985 96057 12.38 235.20

Manufacturing unregistered 154318 58543 8.61 163.60

Electricity, gas & water supply 63730 22082 9.93 188.61

Construction 226325 59336 14.81 281.43

Trade, hotel, transport & comm. 875398 189043 19.11 363.07

Finance, insurance, real estate and business services 457584 107962 17.04 323.84

Social & personal services 411256 143119 9.86 187.35

Comparative Growth Analysis of various sectors: -

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0.00

5.00

10.00

15.00

20.00

25.00

Avg. Growth rate yearly (%)

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

Total growth 90-09 (%)

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Form the above analysis we get a very clear picture of the growth rate comparative in various sectors. As we

can see the Hotel, Comm. sector achieved the maximum growth. Over the last 20 years the comm. sector

achieved a growth of 363.07 %. And the least growth is achieved by forestry and logging sector only 23.84 %

and on average yearly basis 1.25%.

If we analysis the change of every individual sector with the change in the overall GDP. Then we can find out

a correlation between the GDP and every individual sector. The further analysis of this correlation shows

that all the sectors are having correlation of nearly equal to 1.

It means that there is a strong positive relationship between the GDP and the production of every sector.

Thought some of the sectors do not contribute very much to the proportion of GDP but the change with the

change of GDP is very significant.

0

100000

200000

300000

400000

500000

600000

700000

800000

900000

1000000

Pro

du

ctio

n

Comparative Growth Picture

Agriculture

Forestry & logging

Fishing

Mining & quarrying




Construction


Correlation analysis: -

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Sector Correlation with GDP

Agriculture 0.974985798

Forestry & logging 0.959794682

Fishing 0.956385003

Mining & quarrying 0.995154935

Manufacturing registered 0.9962302

Manufacturing unregistered 0.994720885

Electricity, gas & water supply 0.98218774

Construction 0.985274669

Trade, hotel, transport & comm. 0.997350757

Finance, insurance, real estate and business services 0.998748627

Social & personal services 0.991205803

Now in the history of economy every sector does not perform well at every time. In practice for every sector

a lot of variation and fluctuation takes place in terms of annual production. To get an idea over it that is

which sector perform constantly and which sector’s production vary too much we do a variance analysis. In

this we have calculated the Standard Deviation of every sectors production over the last 20 years and found

out the variation result.

0.930.940.950.960.970.980.99

11.01

Corelation with GDP

Variance analysis: -

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Sector SD

Agriculture 60927.65

Forestry & logging 1467.74

Fishing 4108.95

Mining & quarrying 10420.77

Manufacturing registered 66512.39

Manufacturing unregistered 27493.57

Electricity, gas & water supply 12354.62

Construction 48456.56

Trade, hotel, transport & comm. 201302.53

Finance, insurance, real estate and business services 98921.99

Social & personal services 84033.31

The above analysis shows that that the Trade, Hotel, Transport & Comm. Sector is the most fluctuating

sector in terms of production. The fluctuation of production of this sector is almost double than that of most

of the other sectors.

0.00 50000.00 100000.00 150000.00 200000.00 250000.00

Agriculture

Forestry & logging

Fishing

Mining & quarrying




Construction


Finance, insurance, real estate and business …


Standard Deviation

Indian GDP (Gross Domestic Product) Calculation and Analysis

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