The pace of the economy has slowed down in the June-September quarter of 2022-23. According to the Ministry of Statistics and Program Implementation (MoSPI), the gross domestic product (GDP) in the second quarter stood at 6.3%. GDP growth was 13.5% in the June quarter. The GDP growth rate in the July-September quarter last year was 8.4%.

The nominal GDP in Q2 FY23 has been estimated at ₹65.31 lakh crore, while the GDP estimate in Q2 FY22 was ₹56.20 lakh crore. Whereas in the second quarter of 2022-23, real GDP has been estimated at Rs 38.17 lakh crore, while it was Rs 35.89 lakh crore in the second quarter of 2021-22. GDP data for the October-December quarter (Q3 2022-23) will be released on 28.02.2023.

7.2% growth forecast for the current financial year
The RBI had said in its monetary policy meeting earlier this month that the GDP growth rate in the first quarter of the current financial year is likely to be around 16.2%. RBI retained the real GDP growth forecast for FY23 at 7.2%.

What is GDP?
GDP is one of the most common indicators used to track the health of the economy. GDP represents the value of all goods and services produced within a country over a specific time period. In this, the foreign companies that produce while staying within the country’s borders are also included. When the economy is healthy, unemployment levels are usually low.

There are two types of GDP
There are two types of GDP. Real GDP and Nominal GDP. In real GDP, the value of goods and services is calculated at base year’s value or stable price. Currently, the base year for calculating GDP is 2011-12. Means the calculation was done according to the rates of goods and services in 2011-12. Whereas the nominal GDP is calculated at the current price.

How is GDP calculated?
A formula is used to calculate GDP. GDP=C+G+I+NX, where C stands for Private Consumption, G stands for Government Spending, I stands for Investment and NX stands for Net Exports.

Who is responsible for the rise and fall of GDP?
There are four important engines to increase or decrease GDP. The first is you and me. Whatever you spend, it contributes to our economy. Second is the business growth of the private sector. It contributes 32% to GDP. Third is government spending.

It means how much the government is spending to produce goods and services. It has 11% contribution to GDP. And the fourth is note demand. For this, India’s total exports are subtracted from total imports, because India has more imports than exports, so its impact on GPD is negative.

What is GVA?
Gross Value Added, ie GVA, shows the total output and income in an economy. It tells how many rupees worth of goods and services were produced in a given period after taking out input costs and raw material prices. It also shows how much production has taken place in a particular area, industry or sector.

Simply put, apart from telling about the overall health of the GVA economy, it also tells which sectors are struggling and which are leading the recovery. If seen from the point of view of national accounting, the figure obtained after taking out subsidies and taxes in GDP at the macro level is GVA.