TEAM INTRODUCTION

Group Members : Apurva Satia

Hirdayraj Saroj

Aditi mule

GDP- A management measurement tool. Title: Understanding GDP as a management

measurement tool.

MANAGEMENT TOOL?

A conceptual management tool is a structured, model based way of proceeding to improve the problem solving or decision making process either individually or for a group in an organizational context.

ECONOMY OF INDIA

•The economy of India is the seventh-largest economy in the world measured by nominal GDP

•The Third-largest by purchasing power parity(PPP)

•India also topped the World Bank’s growth outlook for 2015-16 for the first time with the economy having grown 7.6% in 2015-16 and expected to grow 8.0%+ in 2016-17

•India has the one of fastest growing service sectors in the world with annual growth rate of above 9% since 2001

WHAT IS GDP?

•THE GDP IS DEFINED AS THE MARKET VALUE OF ALL FINAL GOODS AND SERVICES PRODUCED WITHIN A COUNTRY IN A GIVEN PERIOD OF TIME

•IT IS ONE OF THE MEASURE OF THE SIZE OF THE ECONOMY.

•IT IS AN INDICATOR OF ECONOMIC HEALTH OF ANY COUNTRY.

•IT CAN MEASURE SPENDING ON ALL GOODS AND SERVICES OR IT CAN ALSO MEASURE ALL INCOME EARNED.

GDP?

GDP COUNTS ONLY FINAL GOODS

•Final goods- Finished goods and services produced for the “ultimate user”(end consumer)

•To avoid double counting intermediate goods must be excluded

MEASUREMENT

GDP IS MEASURED BY NATIONAL STATISTICAL AGENCY.

SUCH AS:

• INDIA- MINISTRY OF STATISTICS AND PROGRAMME IMPLEMENTATION

• RUSSIA- FEDERAL SERVICE OF STATE STATISTICS

• UNITED STATES- BUREAU OF ECONOMIC ANALYSIS

EXPENDITURE METHOD

GDP

Government spending

Consumption Gross

investment

Exports-Imports

EXPENDITURE METHOD

GDP = C + I + G +(X-M)

C= CONSUMPTION(Private consumptions)

I= INVESTMENT(Bank,shares etc)

G=GOVERNMENT SPENDING(wages,purchases,etc)

X=EXPORTS(mfgt in india)

M=IMPORTS(mfgt out of india)

PRODUCTION METHOD

GDP

GDP AT FACTOR PRICE

TAXES ON PRODUCTS

AND IMPORT

SUBSIDY ON PRODUCT

PRODUCTION METHOD

GDP(MARKET PRICE) = GDP(FACTOR PRICE) + INDIRECT TAXES – SUBSIDY

ΣN

i + 1

GVA i

In lakhs

GDP=VALUE ADDED

VALUE ADDED METHOD

Sum total of gross value added by all firms economy

VALUE ADDED CONCEPT

Farmer – Wheat produce – sell to mill 10 kg @ Rs.500 – sold to Bakery 10 kg 600 Rs. – sold to customer @ Rs.800

WHAT GDP WAS PRODUCE ?

500 + 600 + 800= 1900 RS ? NO

GDP PRODUCED = Money value of time = 500 + 300= 800 Rs.

FACTOR COST & MARKET PRICE

1 KG SEED 10 DVD TOTAL GDP

Original Cost(factor Cost)

500 Rs 100 Rs. 600 Rs.

-- Governmentsubsidy

-50 0 Govt involved-50+10

+VAT/Indirect taxes +0 +10 -40

Market price 450 110 560(Final good)

Factor cost is orignial value *Remember subsidy Impact on Income Hence (-)*Indirect taxes impact on Income Hence (+)

INCOME METHOD

GDPRENT

INTERESTS PROFITS

WAGES

INCOME METHOD

GDP = W + P + IN + RW=WAGESP=PROFITIN=INTEREST EARNINGR=RENT

If someone expenses than someone incomes

HOW TO ACHIVE 10% GDP GROWTH

•SPECIAL ECONOMIC ZONES FOR EDUCATION(SEZFE)

•EMPOWERING RURAL INDIA

•HEALTH CARE CITIES

•RURAL MALLAS

•INDUS ECONOMIC FREETRADE ZONE(IEFTZ)

DRAMATICALLY DIFFFERENT WORLD

•ECONOMIC SIZE

•ECONOMIC GROWTH

•CURRENCY MOVEMENTS

•BY 2025 BRICs ECONOMIES OVER HALF AS LARGE AS THE G6

•GLOBAL DEMAND PATTERNS

THANK YOU