Home
Account Login
Not Logged In
☰
  • Trade Now
  • About Us
    • Why Choose us
      • About Kotak Securities
      • Awards and Accolades
      • About Kotak Group
      • Technology
      • Strong Research
      • Ease of Use
      • Service
      • Testimonials
    • Media
      • Press Release
      • Corporate Profile
      • Media Kit
    • Careers
      • NISM Course
      • Current Openings
      • Leadership Speaks
      • Recognition
      • Work Culture
  • Offerings
    • Asset Classes
      • Equity
      • Derivative
      • MF
      • IPO
      • ETF
      • Nifty ETF
      • Currency Derivatives
      • Tax Free Bonds
      • Gold ETF
      • Stock Lending & Borrowing (SLBM)
      • Interest Rate Futures
      • Commodity
    • Trading Tools
      • Website
      • KEAT PRO X
      • Kotak Stock Trader
      • Smallcase
      • Fastlane
      • Xtralite
      • Dealer assisted trading
      • Call and Trade
      • TradeSmart Store
      • TradeSmart Derivatives
      • TradeSmart Insights
      • TradeSmart Trends
      • Chat To Trade
    • Account Types
      • Demat Account
      • EquityTrading Account
      • 2 in 1 Account
      • Trinity Account
      • Linked Account
      • NRI Account
      • Foreign Investors (QFI)
      • PMS
      • Private Client Group (PCG)
      • Pearl Account
    • Brokerage Options
      • Free Intraday Trading
      • Dynamic Brokerage
      • Fixed Brokerage
      • Advance Brokerage
      • NRI Brokerage Plans
      • Shubh Trade
    • Value Added Features
      • Refer and Earn
      • Track External Investments
      • WillSecure
      • Margin Calculator
      • Autoinvest
      • Margin Trading Facility
      • Super Multiple
      • BNST
      • Portfolio Tracker
      • SMS Alerts
      • Indicators and Technical Charts
      • Capital gain report
      • Stock as Margin
      • AMO
  • Markets
    • Market Indices
      • Indian Indices
      • Global Indices
    • Equities
      • Share Market Live
      • Gainer
      • Loser
      • Most Active Stocks
      • Volume Buzzer
      • 52Wk High
      • 52Wk Low
    • Derivatives
      • Derivatives Overview
      • Most Active Contracts
      • Gainers
      • Losers
      • Most Active Put
      • Most Active Call
      • Open Interest
      • Highest in Premium
      • Put Call Ratio
      • Historic Data
    • News
      • All News
      • Bullion News
      • Economic Growth
      • Economy General
      • Other News
    • Currencies
      • FII & DII Activities
      • Event Calendar
      • Announcements
      • Recent Deals
        • Block
        • Bulk
    • Currencies
    • FII & DII Activities
    • Event Calendar
    • Announcements
    • Recent Deals
      • Block
      • Bulk
  • Research
    • Live Research Calls
      • Fundamental Call
      • Technical Call
      • Derivatives Call
      • SIP Call
      • Top Monthly Picks
      • Pick of the Week
      • Consensus
      • Research Success Rate
    • Kotak Research Centre
      • Investors Research
      • Trader Research
      • Mutual Fund Research
      • Nifty Call of the Day
    • Latest Research Reports
      • Buyback
      • Stock Recommendations
      • Trading Recommendations
      • Sector research and updates
      • Market strategy research
      • Derivatives strategy
      • Currency and forex insights
    • Research Events
      • Annual Investor
        Conference 2018
      • Research webinars
    • Sample Research Reports
      • Fundamental
      • Technical
      • Derivatives
      • Currency Derivatives
  • Knowledge Bank
    • Kotak University
    • Union Budget
    • Aadhaar Card
    • Equity Trading
    • Derivative Trading
    • Intraday Trading
    • Mutual Funds
    • Financial Planning
    • Pan Card
    • Voter ID
    • Driving License
    • Income Tax
    • Calculators
    • Videos
    • Meaningful Minutes
    • Articles
  • Help
    • Contact Us
      • Branch Locator
      • Open an Account
      • Activate an account
      • Check Application
        Status
      • FAQs
    • Demos
    • Forms
    • Chat
  • Franchisee
    • Overview
      • Login
      • Partner with us
      • What is a Franchisee?
      • How to become a Franchisee?
      • Broker v/s Sub-Broker
      • Business Models
    • About Us
      • Why Join Us?
      • Partner Success Stories
    • Business Models
      • Business Support
      • Training & Events
      • Tools & Software
    • Contact Us
      • FAQs
Home » Meaningful Minutes » 7 Things To Know About New GDP Formula
OFFERINGS: Value added Features
  • Asset Classes
  • Trading Tools
  • Account Types
  • Brokerage Options
  • Margin Position
  • Brokerage Charges
  • Margin Finance FAQs

Meaningful Minutes

It will take you 3 minutes to get a comprehensive perspective on financial topics
 
2 related articles that add to your knowledge
 
One number fact that you should know
 
2014661830565536055253
How it helps?
  • Zero maintenance charges
  • Zero fees for demat account opening
  • Volume based brokerage
Reach Us
Learn the art of Investing

Read More >


  • 7 things to know about new GDP formula

    India recently announced that the economy is expected to grow by 7.4% in 2014-15 against estimates of well below 6%. The economy grew 7.5% in the December 2014 quarter, higher than China's 7.3% making it the fastest growing major economy.

    However, the data has sent analysts and economists into a tizzy. This is because the government has used a new formula for calculating Gross Domestic Product (GDP). Although the new formula is in line with practices followed elsewhere in the world, this has resulted in growth rates revised upwards for two financial years gone by. This has pushed analysts to pull out calculators and rework their expectations for future growth.



Here is a look at the new formula and how it affects the GDP growth figures:

  • How is GDP calculated:

    The Gross Domestic Product is a measure of the economy. It is calculated by adding the total investment, spending - private as well as government - and net exports. However, your spending is somebody else' income. So, the GDP can be calculated by tallying the total income earned in the country or by adding up everybody's expenditure and investment.

  • Rise in productivity:

    Now, even this expenditure method can be calculated using two ways - considering the price you paid in the market or the actual cost of producing goods and services. This is where the key change happened now. India used to calculate GDP using the actual cost of goods and services called as 'factor cost'. Now, it has shifted to the 'market price' mechanism. What this does is measure the increase in the inherent value of goods and services. For example, suppose you produced a good worth Rs 100 earlier for which you spent Rs 80. Today, the demand for the good is higher. As a result, it is valued at Rs 120 today. However, your cost of production remains the same at Rs 80. So, the new GDP calculation at market price - Rs 120, in this case - measures the rise in value of the good. This value addition can be because of improvement in productivity and efficiency. This means, in the last few years, India has witnessed a rise in productivity even though basic quantity of production did not rise.

  • New base:

    Every growth data is a comparison. However, to get an effective idea of the trend in growth, the comparison has to be with the same set of numbers. This is called the base. Earlier, the GDP data was compared to figures from 2004-05. This base year has now been shifted to 2011-12. This change in base year is done every five years. This is because the structure of the economy changes every few years. For example, India is now a service-oriented country. A few years back, it was manufacturing-oriented, while many decades back, the country was dependent on agriculture. So, the new base year is expected to reflect the revised structure of the economy.

  • New data collection:

    The country is vast. It has crores of people and industries working within the boundaries of the economy. Measuring this every quarter is not an easy task. For this reason, the government selects a sample of companies to measure growth. This data is then extrapolated to estimate the country's growth. The government has now updated this sample collection. Earlier, it relied on the Index of Industrial Production (IIP) survey data. Now, it relies on data from ASI or the Annual Survey of Industries, a much larger data sample. The bigger the sample, the more accurate the estimate. This survey also covers the smaller and medium-sized companies, which were not included earlier. This could contribute to the faster growth in GDP.

  • Sector-wise changes:

    The widening of the data collection sample has led to inclusion of new companies in the sample. This in turn led to a rise in the growth of the industries measured in the GDP formula, in comparison with the old data. The manufacturing sector saw the largest increase in growth figures over the past 14 quarters. In fact, the April-June quarter saw manufacturing growth jump by 1.6% in the new data series. Other sectors which saw such upgrades are energy, mining and financial services sector. Even the construction industry saw a marginal rise in growth as per the new data.

  • Classification of companies:

    This is because the government has changed the classification of companies under industry-categories. For example, if a big company deals in manufacturing as well as mining and trading, each of its business units would be classified in a different category. Not now; the company would be classified under the manufacturing category. As a result, the contribution of each major sector - like services, manufacturing, mining, agriculture and so on, has changed. The share of manufacturing in the GDP is up, while services' contribution fell.

  • Inflation effect:

    There are two types of GDP data - nominal and real. This is because of inflation - the rise in prices over time. Inflation eats into the value of money. GDP data which takes into account inflation is called real GDP. It is calculated by adjusting the nominal GDP according to inflation. Recent data shows that nominal GDP growth slowed down to 9% levels from 13% levels in the September quarter, a difference of 4%. In contrast, real GDP growth fell less than 1% between the September and December quarters. This is because of the fall in inflation. Higher the inflation, lower the real GDP growth. So, when inflation falls, real GDP rises faster.

    • Achhe din already here, thanks to statistics Read more

    • India Growth Rate Set to Rival China Read more

  • $2 .1  trillion

    India's GDP may have grown at a faster rate, but the size of the economy - measured by both the formulae - remained unchanged. India's economy was valued at $1.87 trillion in fiscal year 2013-14. This is set to rise to $2.1 trillion in the current fiscal ending March 2015.









Stock Market Sectors :        A | B | C | D | E | F | G | H | I | J | L | M | N | O | P | R | S | T | V | W |

About Us

  • • Branch Locator
  • • About Kotak Securities
  • • Awards and Accolades
  • • About Kotak Group
  • • Technology
  • • Strong Research
  • • Customer Support Chat
  • • Brokerage Charges

Asset Classes

  • • Equity Trading
  • • Derivative Trading
  • • Mutual Fund Investment
  • • IPO
  • • Gold Funds
  • • Currency Derivatives
  • • Fixed Deposits & Tax Free Bonds
  • • Debentures

Derivatives Market

  • • Most Active Contracts
  • • Gainers
  • • Losers
  • • Top Volume Traded
  • • Top Value Traded
  • • Most Active Put
  • • Most Active Call
  • • Open Interest
  • • Highest in Premium
  • • Put Call Ratio

Investment Knowledge Bank

  • • Share Market Basics
  • • What is Demat Account
  • • What are Derivatives?
  • • What are Futures?
  • • What are Options?
  • • What are Mutual Funds?
  • • Basics of Financial Planning
  • • Calculators
  • • Videos
  • • Meaningful Minutes

Trading Tools & Research Reports

  • • KEAT PRO X
  • • Kotak Stock Trader APP
  • • Fastlane
  • • Xtralite
  • • Dealer assisted trading
  • • Call and Trade
  • • Investors Research
  • • Trader Research
  • • Mutual Fund Research
  • • Fundamental Analysis Reports
  • • Technical Analysis Reports
  • • Derivative Reports
  • • Currency Derivative Reports

Account Types & Value Added Services

  • • Demat Account
  • • 2 in 1 Account
  • • Trinity Account (3-in-1 Account)
  • • Linked Account
  • • NRI Account
  • • PMS
  • • Margin Trading
  • • BNST
  • • TradeSmart Store
  • • SMS Alerts
  • • AMO

Equity Market

  • • Share Market Live
  • • Gainer
  • • Loser
  • • Most Active Stocks
  • • Volume Buzzer
  • • 52Wk High
  • • 52Wk Low
  • • All Market News
  • • Bullion News
  • • Economy General
  • • Corporate Actions
  • • Other News
CUSTOMER CARE TOLL FREE

1800 209 9191 / 1860 266 9191

Mon to Fri – 8.00 AM TO 6.00 PM
Sat – 9.00 AM to 2.00 PM
To dial from Mobile phone add city STD code

Existing customers can send in their grievances for Trading account to service.securities@kotak.com
& Demat account to ks.demat@kotak.com

Connect with us

No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account.

KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary. Attention Investors Prevent Unauthorized Transactions in your demat / trading account --> Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors. Circular No.: NSDL/POLICY/2014/0094, NSE/INSP/27436, BSE - 20140901-21

Kindly note that as per NSE circulars nos: NSE/INVG/36333 dated November 17, 2017, NSE/INVG/37765 dated May 15.2018 and BSE circular nos: 20171117-18 dated November 17, 2017, 20180515-39 dated May 15.2018, trading in securities in which unsolicited messages are being circulated is restricted. The list of such stocks are available on the website of NSE & BSE. In case of any queries, request you to kindly get in touch with Customer Service on 18002099191/9292

Kotak Securities Ltd. bearing licence no. CA0268 is a Corporate Agent of Kotak Mahindra Old Mutual Life Insurance Ltd. We have taken reasonable measures to protect security and confidentiality of the Customer Information.

The Stock Exchange, Mumbai is not in any manner answerable, responsible or liable to any person or persons for any acts of omission or commission, errors, mistakes and/or violation, actual or perceived, by us or our partners, agents, associates etc., of any of the Rules, Regulations, Bye-laws of the Stock Exchange, Mumbai, SEBI Act or any other laws in force from time to time.
The Stock Exchange, Mumbai is not answerable, responsible or liable for any information on this Website or for any services rendered by our employees, our servants, and us.

Filling complaints on SCORES- Easy & Quick

a. Register on SCORES portal  |  b. Mandatory details for filling complaints on SCORES  i. Name, PAN, Address, Mobile Number, E-mail ID  |  c. Benefits:  i. Effective Communication  ii. Speedy redressal of the grievances

Charges for Other Services  |  Disclaimer  |  Sitemap  |  Privacy & Security  |  256 Bit Encryption  |  BSE  |  NSE  |  MSE  |  MCX  |  SEBI  |  SCORES  |  Anti Money Laundering Measures  |  Important Policies  |  Dos & Donts  |  National Pension System  |  List of GST Registration Number

© 2005 Kotak Securities Limited.

Registered Office: 27 BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai 400051. Telephone No.: +22 43360000, Fax No.: +22 67132430.
Correspondence Address: Infinity IT Park, Bldg. No 21, Opp. Film City Road, A K Vaidya Marg, Malad (East), Mumbai 400097. Telephone No: 42856825.

CIN: U99999MH1994PLC134051. SEBI Registration No: INZ000200137(Member of NSE, BSE, MSE, MCX & NCDEX), AMFI ARN 0164, PMS INP000000258 and Research Analyst INH000000586.

NSDL/CDSL: IN-DP-NSDL-23-97

New To share Market?

Open Your Account Today!

New Customer?

Hurry! Sign up for Free Intraday Trading now

BROKERAGE FREE

on intraday trades

AVAIL THE OFFER NOW

NO ACCOUNT OPENING CHARGES



Submit

Please Note

That by submitting the above mentioned details, you are authorising Kotak Securities & its sub-brokers & agents to call you and send promotional communication even though you may be registered under DNC.

Open An Account