The 7.6% growth rate registered by Indian economy during the year 2015

The 7.6% growth rate registered by Indian economy during the year 2015-16 is based on

[amp_mcq option1=”Gross National Product at market prices” option2=”Gross Value Added at constant prices” option3=”Gross Domestic Product at market prices” option4=”Gross Domestic Product at constant prices” correct=”option4″]

This question was previously asked in

UPSC CDS-1 – 2017

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The growth rate of an economy is typically measured by the percentage change in Gross Domestic Product (GDP) from one period to another. To measure ‘real’ growth, the effect of inflation is removed by calculating GDP at constant prices (using a fixed base year). The 7.6% growth rate for 2015-16, as reported by the Central Statistics Office (CSO, now part of NSO) based on the revised methodology (base year 2011-12), specifically refers to the growth in GDP at constant (2011-12) market prices.

Real economic growth is measured using GDP or GVA at constant prices to exclude the impact of inflation.

India revised its national income series in January 2015, changing the base year from 2004-05 to 2011-12 and adopting the internationally followed practice of measuring output based on market prices rather than factor cost. The new series also incorporated GVA (Gross Value Added) as a primary measure of economic activity by sector.

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