2. Growth & Development - AW

Question 1

What is Gross Domestic Product (GDP)?

Answer 1

The aggregate final value of goods and services produced within the territory of an economy in a financial year.

GDP is the primary yardstick to gauge the growth of a country and is crucial for policy formulation and comparison.

Question 2

Why is GDP important for a country?

Answer 2

It is crucial for policy formulation and comparison.

Question 3

What major change was made to the base year for GDP calculation in 2015?

Answer 3

The base year was updated to 2011-12.

Question 4

Why was the change to the base year of GDP calculation significant?

Answer 4

It captured changes in the economy’s structure, composition, and consumption patterns, making GDP estimates more accurate.

Question 5

The new GDP methodology uses updated data sources such as _______.

Answer 5

MCA-21

Question 6

Prior to 2015, India’s GDP was estimated using _______.

Answer 6

factor costs

Question 7

The new methodology shifted to _______.

Answer 7

market prices

Question 8

The inclusion of _______ at basic prices for each sector allows for a more detailed analysis.

Answer 8

Gross Value Added (GVA)

Question 9

List all the key keywords and boxed terms related to the changes in GDP methodology (2015).

Answer 9

• Keywords:
• GDP
• base year
• 2011-12
• MCA-21
• factor cost
• market prices
• Gross Value Added (GVA)
• sectoral analysis
• expanded coverage
• financial institutions
• regulatory bodies
• international standards
• System of National Accounts-2008

Question 10

List the main issues with the pre-2015 GDP estimation methodology.

Answer 10

• Outdated base year
• Limited data sources
• Factor cost method
• Incomplete sector coverage
• Not aligned with global standards

Question 11

List the main solutions introduced in the 2015 GDP methodology update.

Answer 11

• Updated base year (2011-12)
• Use of MCA-21 data
• Shift to market prices
• GVA sectoral analysis
• Expanded economic coverage
• International alignment (SNA-2008)

Question 12

What is the way forward for improving GDP estimation?

Answer 12

• Continuous data source updates in India
• Regular base year revision
• Enhanced sectoral analysis
• International comparability
• Accurate data for policy

Question 13

List 4-5 value addition points that provide an edge in understanding the 2015 GDP methodology changes.

Answer 13

• Recognizes structural economic shifts
• Enables sector-specific policy formulation
• Facilitates global economic comparison
• Improves investor and business insights
• Supports evidence-based governance

Question 14

What is potential GDP and why is it important for an economy?

Answer 14

Potential GDP is an estimate of the value of output that the economy would have produced if labor, capital, and technologies had been employed at their maximum sustainable rates, consistent with steady growth and stable inflation. It is used as a yardstick to measure the performance of an economy.

[page 3]

Question 15

What are the main sectors discussed as barriers to realizing India’s potential GDP?

Answer 15

The main sectors are:
* agriculture (fragmented landholdings, lack of infrastructure)
* industry (low technology adoption, missing middle, low productivity)
* global factors (slowdown, protectionism, employability gap, brain drain, logistics costs)

[page 3-4]

Question 16

Cloze: In the agriculture sector, average landholdings were ____ ha in 2015-16, restricting mechanization and scalability.

Answer 16

1.08 ha

[page 3]

Question 17

Cloze: Agri-GDP contribution is ____% despite employing a large workforce, leading to disguised unemployment.

Answer 17

16%

[page 3]

Question 18

Cloze: Only ____% of workers in India are formally skilled, compared to ____% in South Korea.

Answer 18

4.69%; 96%

[page 4]

Question 19

List all the key keywords and boxed terms related to potential GDP and its barriers.

Answer 19

Keywords:
* potential GDP
* maximum sustainable rates
* steady growth
* stable inflation
* fragmented landholdings
* mechanization
* cold storage
* food processing
* value maximization
* missing middle
* low productivity
* global slowdown
* employability gap
* brain drain
* logistics cost
* FPOs
* e-NAM
* PLI Scheme
* Startup India
* MUDRA
* Atal Innovation Mission
* sunrise sector
* 4th IR
* FTAs
* fiscal consolidation
* Viksit Bharat 2047

[page 3-4]

Question 20

What are the main issues preventing India from realizing its potential GDP? (Bullet points, keywords only)

Answer 20

• Fragmented landholdings
• Lack of agri-infrastructure
• Low technology adoption
• Missing middle in industry
• Global slowdown, protectionism
• High employability gap
• Brain drain
• High logistics cost

[page 3-4]

Question 21

What are the main solutions suggested to realize potential GDP? (Bullet points, keywords only)

Answer 21

• Promote FPOs, cooperative farming
• Expand e-NAM, food processing
• High-value agri exports
• Transform youth to job creators
• Increase female labor force participation
• Reskilling, upskilling
• Promote innovation, sunrise sectors
• Integrate with GVCs, FTAs
• Fiscal consolidation, ease of doing business

[page 4]

Question 22

What is the way forward for realizing India’s potential GDP? (Bullet points, keywords only)

Answer 22

• Focus on macroeconomic health
• Fiscal consolidation
• Attract foreign capital
• Promote ease of doing business
• Realize vision of Viksit Bharat 2047

[page 4]

Question 23

List 4-5 value addition points that provide an edge in understanding potential GDP and its barriers.

Answer 23

• Recognizes sector-specific bottlenecks
• Emphasizes role of innovation and upskilling
• Highlights global integration (FTAs, GVCs)
• Connects macroeconomic policy to growth
• Links demographic dividend to economic potential

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