What are the various approaches to GDP estimation in an economy? Which approach is followed by India and why?(

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Q) What are the various approaches to GDP estimation in an economy? Which approach is followed by India and why?(10 marks, 150 words)

अर्थव्यवस्था में सकल घरेलू उत्पाद के आकलन के विभिन्न दृष्टिकोण क्या हैं? भारत किस दृष्टिकोण का अनुसरण करता है और क्यों?

Demand of the Question– The question demands understanding of basics of GDP, methods of estimation, and approaches, what approach is adopted by India and why.

Directive Word– What- This keyword demands mentioning of the methods to estimate GDP. Which and why- Mentioning of the method adopted by India and the reason for it.

Structure of the Answer

Intro– Define GDP. Use data to state what is current GDP, and who computes it.

Body– In the first part, mention and explain the ways in which GDP is estimated. Also mention in which circumstance which method is best suited. In the second part, give reasons for which method is used in India. Describe and elaborate on the factors used in the first part. And in the last part, mention a few shortfalls.

Conclusion– Conclude by stating the importance of GDP in economy and better ways of estimation of economy than GDP.

Part of Syllabus– GS Paper 3- Indian Economy