UPSC Mains Previous Year Question With Answer Lecture 3 – GS Paper Answer writing

Table of Contents

Q.) Explain the difference between the computing methodology of India’s Gross Domestic Product (GDP) before the year 2015 and after the year 2015. (150 Words) (10 marks)

Q.) वर्ष 2015 से पहले और वर्ष 2015 के बाद भारत के सकल घरेलू उत्पाद (जीडीपी) की गणना पद्धति के बीच अंतर स्पष्ट करें। (उत्तर 150 शब्दों में दें)

General Studies – 3 Economic Development, Agriculture, Science, and Technology,

Environment and Ecology, Security, Disaster Management

Gross domestic production (GDP) is the final value of the goods and services which is produced within the geographic boundaries of a country during a specified period of time, normally a year.
GDP is the most commonly used measure for the size of an economy.
GDP calculation in India before 2015:
– In India before 2015 GDP calculation was based on GDP at Factor cost with base year as 2004-2005.
GDP calculation in India after 2015:
-Post 2015 India has shifted GDP calculation from factor cost to market price with base year as 2011- 2012.
Factor cost is the ‘Price’ of the commodity from the producer’s side. Market cost is derived after adding the indirect taxes to the factor cost of the product.
The formula to calculate is Market Cost= Factor Cost-Subsidies+Indirect Taxes.

What is Factor Cost?

The manufacturing process needs a lot of inputs. Land, labor, capital, and entrepreneurship are examples of these inputs, which are referred to as factors of production.
The use of these elements of production comes at a cost to producers of goods and services.
The cost of factors of production borne by a company when manufacturing goods and services is referred to as factor cost.
- Renting machines, acquiring machinery and land, paying employees and wages, and getting money are all examples of such production costs.
Taxes paid to the government are not included in the factor cost since they are not directly engaged in the production process and so are not a component of the direct production cost.