Skip to content
FreeFinance

Growth and GDP

One number stands in for a whole economy. What does it actually count, who counts it, and what does it leave out?

Chapters

Beginner

  1. What GDP measuresThe market value of everything produced inside a country in a period. Which means it counts a tree being felled and not the forest that is gone, and your rent but not your cooking — and those are decisions, not oversights.

Intermediate

  1. GVA, net taxes and GDPTwo growth rates are published for the same quarter and they disagree. In Q1 of 2026-27 value added grew 11.5% and GDP grew 10.3% — and the whole of the gap is a tax line that went backwards.
  2. Real, nominal and the deflatorNominal GDP grew 10.3% and real GDP grew 7.8% in the same quarter. The difference is a third official inflation measure — and it came out at 2.3% while the CPI was running above 5%.
  3. Where the number comes fromQuarterly GDP is not measured. It is last year's benchmark moved by this quarter's indicators — railway tonne-kilometres, wireless data usage, vehicle registrations, GST receipts and about twenty other things.

Advanced

  1. Revisions and the base yearIn February 2026 India moved its national accounts to a 2022-23 base and restated every quarter back to 2022. Growth rates for years that were already history changed — and the old and new series cannot be joined.
  2. What GDP does not tell youIt was never designed to measure welfare and its inventor said so. It has no opinion on who got the growth, counts repairing damage as output, and in Q1 of 2026-27 two of its components together moved it by more than the headline.