Jitendra Kumar Sinha
Gross Domestic Product (GDP) serves as a fundamental measure for assessing economic activity within a nation, representing the total value of all goods and services produced within its borders during a specified timeframe. The calculation of GDP typically employs three primary methodologies: the production approach, the income approach, and the expenditure approach. This study specifically focuses on the Expenditure Method. The Expenditure Method involves aggregating the total value of final goods and services purchased by four mains categories of spending agents: households, firms, government entities, and foreign purchasers. This paper aims to investigate the intricate relationship between the components comprising GDP under the Expenditure Method and the overall GDP figure. It places particular emphasis on elucidating the correlation between each component of GDP and the aggregate GDP, while also examining the impact of inflation on the genuine growth trajectory of economic activity. Furthermore, this study aims to explore public perceptions regarding the factors influencing GDP and the underlying reasons for these perceptions. Among the factors analyzed, six were found to have a significant impact on the decline in GDP during the study period. These factors include improper execution of demonetization policy, implementation of GST, decreased consumption of goods, decrease in investments, decrease in exports, and slowdown in industrialization. The findings suggest that these factors played a substantial role in the observed decline in GDP. Through this analysis, we endeavor to discern the true trend inherent in this macroeconomic indicator.