Represents "Recession" which is a period of significant decline in general economic activity of India accompanied by fall in prices.
Represents Recession which is a period of significant decline in general economic activity of India accompanied by fall in prices.
Represents fall in Real GDP growth accompanied by rise in Nominal GDP reflecting rise in prices."
Represents fall in Real GDP growth accompanied by rise in Nominal GDP reflecting rise in prices."
Represents fall in Real GDP growth accompanied by rise in Nominal GDP reflecting rise in prices.

Fortune favors the prepared, and for our first story Meradesh was working on the data and data visualization of GDP growth of India has nicely coincided with Arvind Panagariya’s allegations that the government of India has been cooking the GDP growth figures. He did not mention the word ‘cooking’ but I am sure that is what he meant.

An Indian with inadequate water, interrupted electricity and education but overzealous propensity to litter and spit, has nary a care about GDP figures or a free float market weighted stock market index. But we, at Meradesh, have no opinion one way or the other.

What we have here is a story of GDP growth of India, in pure numbers. We would be keeping 1991 as base year for most of our stories as from that year begins our post-liberalization story.

The technical details follow this and explain most of the terms and our statistician has taken 2010 as base year because of the world bank data that we have employed as it provides us with recent economic conditions to compare with.

How to read the graph?

The line graph illustrates how trend of GDP(PPP) vs Nominal GDP changed over time.

The X axis represents GDP - PPP (billions of $) and Y axis represents Nominal GDP (billions of $).

For most of the years between 1991 and 2017,there is an upward trend in GDP with an exception in 2007-2008 due to global financial crisis/recession.

The shaded area depicts India's Real GDP growth over time falling between 3.5% - 7% for most of the years. The highest growth(7.02%) was recorded in 2010 and the lowest (1.58%) in 2008.

Further, Real GDP growth fell in 2011 and 2017 with an increase in GDP(PPP) and Nominal GDP values indicating inflation.

Technicals

GDP (Gross Domestic Product) is the total market value of all final goods and services produced in a country in a given period.

GDP = private consumption + gross investment + government investment+ government spending + (exports – imports)

To make international comparisons, country's statistics must be converted into a common currency ($). The two most common methods to convert GDP into a common currency ($) are nominal and purchasing power parity (PPP).

1. Nominal GDP estimates are commonly used to determine the economic performance of a whole country using market exchange rates for conversion. It does not take into account differences in the cost of living in different countries.

NGDP j = Q j * P j

for j = 1991, 1992, 1993, …., 2017 and

Q: Quantity of goods and services produced in the current year

P: Price of goods and services in the current year

2. GDP-PPP takes into account differences in living standards between nations because currency of one country is converted into that of the second country in order to purchase the same volume of goods and services in both countries.

GDP (PPP) j = NGDP j / PPP exchange rate j (in $)

3. Real GDP (expressed in base year prices) is a measure of a country's total economic output that is inflation adjusted. This makes comparing of GDP in different years more meaningful, because it allows comparisons of the actual volume of goods and services without inflation. 2010 is taken as the base year price.

RGDP j = Q j * P 2010

for j = 1991, 1992, 1993, …., 2017 and

Q: Quantity of goods and services produced in the current year

P: Price of goods and services in year 2010

Percentage Change in Real GDP is calculated as :

% Change (Real GDP) = ( RGDP j+1 - RGDP j ) / RGDPj * 100

Source : World Bank and Federal Reserve Economic Data