GPD, GDP per capita, India's economic history

[jackson6612]

Please reply in layman terms. Thanks.

Gross Domestic Product, GDP, is the amount of goods and services produced in a year, in a country. It is the market value of all final goods and services made within the borders of a country in a year. I think it's the financial value (in other words, collective price of all the goods and services - price as decided by the international market - originating inside a country of all products such as electronic goods, machinery, fabric market, manufactured inside a country's borders. What do "services" refer to? Many overseas companies have their call centers in India. Isn't it also a form of a service?

GDP, aggregate economic activity, is one of the important aggregate measures in the national accounts - National accounts or national account systems (NAS) are the implementation of complete and consistent accounting techniques for measuring the economic activity of a nation (or other geographic area in the broader term social accounts).

From Wikipedia's article on Economic history of India:
1875–1900
USA was the world's largest economy followed by China, UK, Germany and India. Collapse of the central authority of the Qing Dynasty and the resultant chaos triggered China's short but rapid decline on the world stage. The gross domestic product of India in 1900 was estimated at about 20 per cent that of the USA.

The Crown treasury reported annual revenue of £122 million in circa 1900. While the revenue in terms of Pound Sterling reported very low growth, it does not take into account the price of Rupee falling drastically, which is needed to understand the growth of revenue in terms of Indian economy.

What does the bold part mean?

Graph:
http://en.wikipedia.org/wiki/File:Per_capita_GDP_of_South_Asian_economies_&_SKorea_(1950-1995).png

The graph shows GDP per capita of South Asian economies and South Korea as a percent of the American GDP per capita.

What is GDP per capita? Is it GDP divided by a country's population?

According to the graph Pakistan's GDP per capita has always been higher than India since the partition till '95. But I don't see how. Could you please help me with it?

 

[NobodySpecial]

Gross Domestic Product, GDP, is the amount of goods and services produced in a year, in a country.

Think of it as the sum of all the money that changed hands when stuff was bought or sold.

What do "services" refer to?

Anything you pay for where you don't get a physical object. Think of everyone working in an office rather than a factory.
In most western countries, services - such as banking, stockmarkets etc make up a larger part of the economy than making things so they are included in the figure.

While the revenue in terms of Pound Sterling reported very low growth, it does not take into account the price of Rupee falling drastically, which is needed to understand the growth of revenue in terms of Indian economy.

It means that in GDP terms India looked tiny - eg it had the same amount of money as an English railway company at the time. But in India those pounds bought a lot - so India could have a lot of internal trade but it doesn't look much in pounds.

What is GDP per capita? Is it GDP divided by a country's population?

Yes - capita is latin for head, so it means per head of population

According to the graph Pakistan's GDP per capita has always been higher than India since the partition till '95. But I don't see how. Could you please help me with it?

GDP isn't always a very useful figure - even when it is accurately counted.
India in that period had a very centralized state economy, everything had to be made in India and by Indian companies - so very little of the economy showed up on the world market. Pakistan I expect, imported a lot more so more countable cash flowed in and out of the country.
Also the population of Pakistan is a lot smaller, so all those 100Ms of Indians living in villages that never used cash drags the Indian average down a lot.