GDP - General awareness questions on current affairs

1)   CSO has announced that India’s GDP has accelerated in Q2 (2016-2017) to what percent?

a. 7.1
b. 7.2
c. 7.3
d. 7.4
Answer  Explanation 

ANSWER: 7.3

Explanation:
Central Statistical Office on 30th Nov 2016 announced India’s GDP accelerated to 7.3 percent in the second quarter of 2016-2017. This is up from a provisional 7.1 percent expansion in Q1.

Gross Value Added rose to 7.1 percent.

GDP growth accelerated in the second quarter from 7.1 percent, but GVA growth slowed 7.3 percent in that period.

Both GDP and GVA growth were slower in this Q2 compared to 2015-2016’s Q2. The Q2 of 2015-2016 showed a GDP growth of 7.6 percent and GVA growth of 7.3 percent.

The agriculture sector maintained the overall growth by registering a 3.3 percent GVA growth rate in Q2 of this financial year in comparison with 2 percent in Q2 of 2015-16.

The manufacturing sector saw considerable slowdown as it registered GVA growth of 7.1 percent in Q2 of this financial year as against 9.2 percent in 2015-2016’s Q2.

The mining and quarrying sector growth fell by 1.5 percent in Q2 compared with the contraction of 0.4 percent in the first quarter and a growth of 5 percent in Q2 of 2015-16.

Sectors like manufacturing, electricity, mining, services and others show a fall in the September quarter because they are not supported by demand.

Except for agriculture, public administration and construction, drop in outputs across all sectors took place.

Gross fixed capital formation equalled 29 percent of GDP in this Q2 compared to 32.9 percent in the previous year’s Q2.

Government final consumption expenditure was 13 percent of GDP in this Q2 compared to 12.1 percent in the earlier year. GFCE grew 18.8 percent in this Q1 and 15.2 percent in this Q2.

Government’s Capital Expenditure (Plan and Non Plan) fell 12.81 percent to INR 129459 crore as against INR 143329 crore a year back.

What is GDP?

GDP: Monetary value of all finished goods and services produced in a country in a certain time period. It is generally calculated on annual basis; it can be computed on quarterly basis as well.

It is a broad measurement of nation’s overall economic activity.

GDP = Private consumption+ Public consumption+ Government outlays+ Investments + Exports - Imports.

Where, GDP = C + G + I + NX

  • C = all private consumption, or consumer spending
  • G = sum of government spending,
  • I = sum of all the country's investment, including businesses capital expenditures and
  • NX is the nation's total net exports, calculated as total exports minus total imports (NX = Exports - Imports).


2)   India Ratings and Research has revised FY17 estimates of CAD from 1.2 percent to how much?

a. 1.3-1.4
b. 1.4-1.5
c. 1.3-1.5
d. 1.3-1.6
Answer  Explanation 

ANSWER: 1.3-1.5

Explanation:
Ind-Ra lowered FY2017 CAD estimate to 1.3-1.5 percent from 1.2 percent due to lower remittances and software earnings in forth quarter for current fiscal. India’s CAD narrowed sharply to USD 0.3 billion/o/1 percent of GDP in Q4, FY2016 from USD 7.1 billion or 1.3 percent in Q3 on account of lower trade gap.

  • For the 2015-2016 fiscal, CAD or the difference in the in and outflow of foreign exchange fell to 1.1 percent of the GDP
  • Low CAD indicates stability on the external front. On the one hand, low crude prices and collapse in global prices of commodities have resulted in lower trade deficit
  • Low oil prices have caused Middle East economies to suffer as well.
  • Remittances on private transfers fell to USD 63.1 billion in 2015-2016


3)   India is going to experience which rate of economic growth according to CII in 2016-2017?

a. 7.4%
b. 7.5%
c. 7.9%
d. 8%
Answer  Explanation 

ANSWER: 8%

Explanation:
Terming GDP calculation as an imprecise science, CII has pegged the economic growth of the country at 8 percent for the current fiscal, higher than 7.6% pegged by the RBI. GDP growth of 8 percent is expected in 2016-2017says CII President Naushad Forbes. The basis for this economic prediction includes strong macroeconomic fundamentals and good business sentiments as well as downward trend in interest rates. CII’s new president also highlighted the need for focusing on regulatory mechanisms.