1] Gross Domestic Product [GDP]
The term economic growth indicates quantity or size. It has a quantitative dimension, ie an increase in the size or quantity of output produced over a period of time. This is the GDP ie the “gross money value of all final goods and services produced in the domestic/geographical boundaries of a country during a given period of time usually a year irrespective of citizenship”.
Some economists have defined economic growth in terms of GDP. When GDP increases steadily over a long period of time there is economic growth. It implies that economic growth is increased output of goods and services. It is measured in terms of annual percentage changes.
Economic growth is generally measured in terms of GDP at constant prices (this needs a base year so that effects of inflation and deflation can be eliminated).
Gt = Growth rate in time period “t”.
Qt = GDP (fc) in time period “t”.
Q(t-1) = GDP (fc) in time period “(t-1)”.
Growth rate is always expressed in terms of annual percentage changes and therefore multiplied by 100.
According to economic survey 2011-2012 the real GDP in
2009-2010 was Rs 4507637/- crore
2010-2011 was Rs 4885954/- crore
ie a growth rate of 8.4%
GDP growth rate is important because it shows how fast the economy is growing.
2] Per Capita Income.
The concept of economic growth refers to changes not only in the total output (GDP) but also a rise in the per capita income. “Per Capita income is the average income of the nation”
PCI = GROWTH RATE OF NATIONAL INCOME – GROWTH RATE OF POPULATION.
An increase in Per Capita Income indicates an increase in economic growth. As long as the increase in national income is greater than the increase in population there will be an increase in Per Capita Income and therefore an increase in economic growth.
According to economic survey 2010-2011 the PCI in 2009-2010 was Ra 40745/-
According to economic survey 2011-2012 the real PCI in
2009-2010 was Rs 33843/-
2010-2011 was Rs 35993/-
ie a growth rate of 6.4%
3] Per Capita Consumption
The main objective of any economy is to increase the standard of living and welfare of the people. This in turn depends on a higher Per Capita Consumption. “Per Capita Consumption is the average consumption of a nation”.
According to economic survey 2010-2011 the PCC of India in 2009-2010 was Rs 23626/-
Therefore to measure the changes in the standard of living the Per Capita Consumption is the right measure.