Full Form of GDP

Full form of GDP  is  Gross Domestic Product.

After COVID19, in the year 2020, the most discussed thing was GDP. 

As soon as lock down extended for more than 2 months, everyone predicted that it is going to affect economy a lot. Even those people who have zero knowledge about GDP, GNP and National income also predicted the same thing and everything happened just because of "Act of God'. So what did happen actually? Basically NSO released Q1 report of 2020-21 which showed GDP growth of our country as -23.9%.

Now the question is what is GDP?

It is Gross Domestic Product, which indicates the economic growth and economic health of a country.

Why the growth is in negative and how is it calculated?

Before the year 1996, this was calculated on yearly basis but after that we started calculating it on the quarter basis where we basically compare the present quarter's GDP with last year's quarter which means the growth from last quarter has decreased by 23.9%. There is no hope for positive growth which means that in the upcoming quarters also, the growth is going to be in negative as well and will range from -15 to -10%. It is being assumed that the next year's GDP can show positive growth rate for our economy which is very obvious, because next year's GDP will be compared with this year's and it will definitely show positive growth. 

It is not only our country which is facing economical slowdown. There are so many other developing and developed countries as well which are facing the same situation. For example United Kingdom being a developed nation faced a negative growth of 21.7%. There are even countries who also had positive growth. These are the one whose apps we have banned recently.

Lets see how to calculate GDP.

There are some sectors in our economy who contributes towards growth of our economy. For example, consumption, investments, government expenditure and net export. When these sectors show sign of growth, GDP grows, but every sector do not contribute equally. For example, in last year's GDP private consumption contributed around 54.4%, private investments contributed 32%, Government expenditure. contributed 11% and net export of our country always shows negative result because we export less and import more. But this year this number is in positive figure which is again not so good for our economy because it shows that we have demanded less product and it will ultimately shrink our economy.

What will be the after effect of these numbers?

GDP of our country is the lowest in the last 40 years, this will increase in unemployment rates which is again highest of last 45 years. When unemployment increases, it not only comes with financial effects but also comes with social effects as well. One of them is increase in suicide rates.
Increase in suicide is more dangerous for our country, because financial pressure creates highest number of suicides in our country and it occurs mostly in the age group between 15-29 years, which is working population of our country and also they contribute more in our economy. So this has macro effects on country and micro effects on a single household. The fall in the growth rate was already predicted by the RBI and other economist as well, but their prediction was up to 15 to 20%.

If we talk about solutions, then consumers will have to increase the demand and investors will have to invest to create the money flow in the market. To make people demand, the goods, money is the foremost requirement. Some people don't have enough money to demand, for example, migrant workers, and the ones who are in a mood of saving the money because they have no more trust in the current government.

Three solutions  which can boost our economy as suggested by Former Prime Minister Dr. Manmohan Singh in his interview given to BBC news through Mail is as follows:

1. Provide financial assistance to people so that they can demand.

2. Give credit support to private investors.

3. Increase RBI intervention in economy.

At the end I would like to conclude this topic by saying that we have 2nd largest population in the world. Our youth is very capable and educated, so why not to use the youth population as asset instead of liability so that we can contribute a lot towards our country's economical growth and development.