GPD, GDP per capita, India's economic history

In summary, the conversation discusses the concept of Gross Domestic Product (GDP) and its role as an aggregate measure of a country's economic activity. Services, such as banking and stock markets, are included in GDP calculations and can make up a significant portion of a country's economy. The conversation also touches on the historical GDP of India and how its centralized state economy impacted its GDP compared to Pakistan's, which had more international trade. GDP per capita is calculated by dividing GDP by a country's population and can be affected by various factors such as trade and population size.
  • #1
jackson6612
334
1
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?
 
Science news on Phys.org
  • #2
jackson6612 said:
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.
 

1. What is GPD and how is it different from GDP per capita?

GDP stands for Gross Domestic Product and is the total value of all goods and services produced within a country's borders in a specific time period. GPD, on the other hand, stands for Gross Domestic Product per capita and is calculated by dividing the GDP by the total population of a country. This gives a more accurate representation of the average economic well-being of the citizens in a country.

2. How has India's GDP per capita changed over time?

India's GDP per capita has seen significant growth over the years. In the 1950s, it was around $100, but by 2019 it had reached $2,104. This growth can be attributed to various factors such as economic reforms, industrialization, and a growing service sector.

3. What role did colonization play in India's economic history?

India's economic history has been greatly impacted by colonization. During the British rule, India's economy was primarily based on agriculture, with the majority of the population being farmers. This led to the exploitation of resources and the draining of wealth from India to Britain. It wasn't until India gained independence in 1947 that the country's economy began to shift towards industrialization and modernization.

4. How does India's GDP per capita compare to other countries?

India's GDP per capita is lower than many developed countries, such as the United States and Japan, but it is higher than some other developing countries. In 2019, India's GDP per capita was ranked 142nd out of 189 countries by the World Bank. However, India's population size must also be taken into consideration when comparing GDP per capita to other countries.

5. What are some challenges facing India's economy today?

India's economy faces several challenges such as income inequality, high unemployment rates, and a large informal sector. The country also struggles with issues such as corruption, inadequate infrastructure, and a large population living below the poverty line. However, the government is implementing various policies and reforms to address these challenges and promote economic growth and development.

Similar threads

  • Art, Music, History, and Linguistics
Replies
11
Views
1K
  • General Discussion
Replies
6
Views
1K
Replies
2
Views
5K
  • General Discussion
Replies
20
Views
7K
  • General Discussion
2
Replies
36
Views
17K
Replies
8
Views
821
Replies
16
Views
7K
  • General Discussion
Replies
2
Views
3K
  • General Discussion
Replies
22
Views
5K
  • General Discussion
Replies
17
Views
4K
Back
Top