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Define potential GDP and explain its determinants. What are the factors that have been inhibiting India from realizing its potential GDP? (150 words) [UPSC 2020]
Potential GDP refers to the maximum output an economy can produce when operating at full capacity, utilizing its resources efficiently without generating inflationary pressures. It reflects the economy's long-term productive potential, considering the available labor, capital, and technology. DetermRead more
Potential GDP refers to the maximum output an economy can produce when operating at full capacity, utilizing its resources efficiently without generating inflationary pressures. It reflects the economy’s long-term productive potential, considering the available labor, capital, and technology.
Determinants of Potential GDP include:
Inhibitors of India’s Potential GDP:
Addressing these factors could help India better realize its potential GDP.
See lessExplain the difference between the computing methodology of India’s Gross Domestic Product (GDP) before the year 2015 and after the year 2015. (150 words) [UPSC 2021]
भारत की सकल घरेलू उत्पाद (GDP) की गणना विधि में 2015 के पहले और बाद का अंतर **1. 2015 के पहले की गणना विधि: पुराना आधार वर्ष: GDP की गणना के लिए भारत 2004-05 को आधार वर्ष मानता था। इस आधार पर डेटा संकलित कर मौजूदा मूल्य निर्धारण किया जाता था। सर्वेक्षण आधारित डेटा: GDP की गणना के लिए बड़े पैमाने परRead more
भारत की सकल घरेलू उत्पाद (GDP) की गणना विधि में 2015 के पहले और बाद का अंतर
**1. 2015 के पहले की गणना विधि:
**2. 2015 के बाद की गणना विधि:
उदाहरण: 2015 से पहले GDP वृद्धि दर की गणना में अधिक त्रुटियाँ और डेटा की अपूर्णता की समस्या थी। नए आधार वर्ष के साथ, GST और डिजिटल लेनदेन के डेटा का उपयोग कर GDP की गणना अधिक सटीक और अर्थव्यवस्था की वास्तविक स्थिति को दर्शाने लगी है।
निष्कर्ष: 2015 के बाद की गणना विधि ने GDP की गणना को अद्यतन और सटीक बनाया है, जिससे भारतीय अर्थव्यवस्था की वास्तविक स्थिति का बेहतर आकलन संभव हो सका है।
See less"Economic growth in the recent past has been led by increase in labour productivity." Explain this statement. Suggest the growth pattern that will lead to creation of more jobs without compromising labour productivity. (250 words) [UPSC 2022]
Economic Growth and Labour Productivity **1. Role of Labour Productivity in Economic Growth: Labour productivity refers to the output per unit of labour input. Recent economic growth has been significantly driven by improvements in labour productivity. For instance, India's IT sector has seen tremenRead more
Economic Growth and Labour Productivity
**1. Role of Labour Productivity in Economic Growth:
**2. Recent Examples:
Growth Pattern for Job Creation and Labour Productivity
**1. Skill Development and Education:
**2. Support for Emerging Sectors:
**3. Entrepreneurship and Small Enterprises:
**4. Infrastructure Development:
By focusing on skill development, supporting emerging sectors, fostering entrepreneurship, and investing in infrastructure, India can create more jobs while maintaining high labour productivity. This balanced approach ensures sustainable economic growth and equitable job distribution.
See lessDistinguish between ‘care economy’ and ‘monetized economy’. How can care economy be brought into monetized economy through women empowerment? (250 words) [UPSC 2023]
Care Economy vs. Monetized Economy: Care Economy: Definition: The care economy encompasses all activities related to caregiving, including child care, elder care, and domestic work. These activities are primarily performed within households and are often unpaid or underpaid. Characteristics: It is cRead more
Care Economy vs. Monetized Economy:
Care Economy:
Monetized Economy:
Bringing Care Economy into Monetized Economy through Women Empowerment:
Recent Example:
Conclusion: Integrating the care economy into the monetized economy through women empowerment involves formalizing care work, improving wages and working conditions, providing training, and supporting women entrepreneurs. This approach not only enhances the recognition and compensation of care work but also contributes to economic growth and gender equality.
See lessEvaluate the government's efforts to improve the efficiency and transparency of the public investment management system, including the use of performance-based budgeting, outcome-based monitoring, and data-driven decision-making, and assess their impact on improving the quality and impact of public expenditure.
The Indian government has taken several steps to improve the efficiency and transparency of the public investment management system, with the aim of enhancing the quality and impact of public expenditure. Some of the key initiatives and their impact are as follows: Performance-Based Budgeting: The gRead more
The Indian government has taken several steps to improve the efficiency and transparency of the public investment management system, with the aim of enhancing the quality and impact of public expenditure. Some of the key initiatives and their impact are as follows:
Impact on Improving Public Expenditure:
Overall, the government’s initiatives to improve the efficiency and transparency of the public investment management system have shown promising results, but sustained efforts are required to fully realize the potential of these reforms and ensure that public expenditure has a meaningful impact on the country’s development priorities.
See lessAnalyze the government's initiatives to promote regional balanced development, such as the Transformation of Aspirational Districts program and the special economic packages for the northeastern states, and evaluate their impact on reducing inter-state and intra-state disparities.
The Indian government has undertaken several initiatives to promote regional balanced development and address the issue of inter-state and intra-state disparities. Two notable programs in this regard are the Transformation of Aspirational Districts (TAD) program and the special economic packages forRead more
The Indian government has undertaken several initiatives to promote regional balanced development and address the issue of inter-state and intra-state disparities. Two notable programs in this regard are the Transformation of Aspirational Districts (TAD) program and the special economic packages for the northeastern states.
Transformation of Aspirational Districts (TAD) Program:
Special Economic Packages for the Northeastern States:
Evaluation of Impact on Reducing Disparities:
Achieving truly balanced regional development remains an ongoing challenge for the Indian government. Sustained efforts, enhanced resource allocation, and a more holistic and integrated approach targeting the multifaceted causes of regional disparities are necessary to foster inclusive and equitable growth across the country.
See lessExamine the government's efforts to align India's economic planning with the Sustainable Development Goals (SDGs) and the Paris Agreement on climate change, and assess the challenges and opportunities in integrating environmental and social considerations into the country's development priorities.
The Indian government has made efforts to align its economic planning with the Sustainable Development Goals (SDGs) and the Paris Agreement on climate change. However, integrating environmental and social considerations into the country's development priorities has presented both challenges and oppoRead more
The Indian government has made efforts to align its economic planning with the Sustainable Development Goals (SDGs) and the Paris Agreement on climate change. However, integrating environmental and social considerations into the country’s development priorities has presented both challenges and opportunities.
Aligning with the SDGs and Paris Agreement:
Challenges in Integration:
Opportunities and Emerging Trends:
To effectively integrate environmental and social considerations into India’s economic planning, a comprehensive and sustained approach is required. This may involve strengthening institutional mechanisms, improving data and monitoring systems, mobilizing innovative financing, and fostering multi-stakeholder collaboration. Balancing the imperatives of economic growth, environmental sustainability, and social equity will be crucial for India’s journey towards sustainable and inclusive development.
See lessAnalyze the evolution of India's economic planning approach, from the centralized, command-and-control model of the Nehruvian era to the more market-oriented, decentralized approach of recent decades, and assess the effectiveness of each approach in promoting sustainable and equitable growth.
India's approach to economic planning has evolved significantly over the decades, transitioning from a centralized, command-and-control model in the Nehruvian era to a more market-oriented, decentralized approach in recent decades. This transformation has had varying impacts on the country's pursuitRead more
India’s approach to economic planning has evolved significantly over the decades, transitioning from a centralized, command-and-control model in the Nehruvian era to a more market-oriented, decentralized approach in recent decades. This transformation has had varying impacts on the country’s pursuit of sustainable and equitable growth.
The Nehruvian Era of Centralized Planning:
The Shift Towards Market-Oriented Reforms:
Effectiveness in Promoting Sustainable and Equitable Growth:
In conclusion, India’s economic planning approach has evolved from a centralized, command-and-control model to a more market-oriented, decentralized approach. Each approach has had its own strengths and limitations in promoting sustainable and equitable growth. Striking the right balance between efficiency, sustainability, and equity remains a key priority for India’s ongoing economic development and transformation.
See lessExplain the concept of GDP deflator? How is it different to other inflation indices such as CPI and WPI?
The GDP deflator is the ratio of the value of goods and services an economy produces in a particular year at current prices, to that, at prices prevailing during any other reference (base) year. GDP deflator = (Nominal GDP/Real GDP)*100 This ratio basically shows to what extent an increase in GDP inRead more
The GDP deflator is the ratio of the value of goods and services an economy produces in a particular year at current prices, to that, at prices prevailing during any other reference (base) year. GDP deflator = (Nominal GDP/Real GDP)*100 This ratio basically shows to what extent an increase in GDP in an economy has happened on account of higher prices, rather than increased output. Hence, it is a good measure of inflation. For example: if an economy has a nominal GDP of $100 billion and has a real GDP of $80 billion, the economy’s GDP price deflator can be calculated as ($100 billion / $80 billion) x 100, which equals to 125. This means that the aggregate level of prices have increased by 25 percent from the base year to the current year. Other than GDP deflator, there are various indices such as Wholesale Price Index (WPI), Consumer Price Index (CPI), Producer Price Index (PPI), Commodity Price Index, Cost of Living Index, Capital Goods Price Index etc. that are used to measure inflation. But WPI and CPI are widely used indices to calculate inflation all over the world.
Differences between the GDP deflator, CPI and WPI are as follows:
In India, WPI was used as a key measure of inflation for a long time, but now CPI is ation for being used for the same, as it covers services and also measures inflation from consumers’ end instead of manufacturers’ end.
See lessExamine the government's initiatives to promote the integration of the informal sector into the formal economy, such as the expansion of social security coverage and the simplification of business regulations, and assess their impact on improving the productivity and resilience of the overall economy.
The government has undertaken several initiatives aimed at integrating the informal sector into the formal economy, with the goal of improving the productivity and resilience of the overall economy. One key initiative is the expansion of social security coverage to include workers in the informal seRead more
The government has undertaken several initiatives aimed at integrating the informal sector into the formal economy, with the goal of improving the productivity and resilience of the overall economy.
One key initiative is the expansion of social security coverage to include workers in the informal sector. This includes measures such as the introduction of targeted social security schemes, like pension and health insurance programs, that cater to the needs of informal workers. By providing a safety net and access to essential services, these initiatives can help improve the well-being and financial security of informal sector workers, potentially incentivizing them to join the formal economy.
Another important initiative is the simplification of business regulations and the easing of requirements for registering and operating formal enterprises. This can help lower the barriers to entry for informal businesses, making it easier for them to transition into the formal sector. Reduced bureaucratic hurdles and compliance costs can make it more attractive for informal businesses to register and operate within the formal framework.
The potential impacts of these initiatives on the overall economy include:
However, the impact of these initiatives may be constrained by various factors, such as the persistence of deep-rooted informality, the availability of suitable incentives and support mechanisms for informal businesses, the capacity of government agencies to effectively implement and monitor the initiatives, and the broader economic and political context.
Additionally, it will be crucial to ensure that the formalization process is inclusive and does not inadvertently disadvantage or marginalize certain segments of the informal sector, such as micro-enterprises or vulnerable workers. Careful design and implementation of these initiatives, coupled with ongoing monitoring and evaluation, will be necessary to maximize their positive impact on the overall economy.
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