Diesel

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that matter.
Tracing origins of GDP:
Basically the concept of measuring economy
started in the 17th century by William Petty in
England and Wales to ascertain a nation’s capacity
to pay taxes & till 18th and 19th century, tax
revenue and trade remained the sole objective.
However, prior to this, the Arthashastra, written
by Chanakya (350 – 283 B.C) for the Mauryan
empire, had the genesis for the economic policy
of the Mauryan empire. Since the 17th century,
right from the industrialisation to the race for the
domination of Europe during industrialisation
which led to wars among the colonial powers,
the countries needed to know the ability of
people to pay taxes to finance wars.
The need to measure the nation’s economy had
risen during the economic depression after the
First World War when Simon Kuznets, heading the
National Economic Advisory Council, submitted
a report in 1934 to US Congress which contained
estimates of national economy that made a
huge difference to policymaking. It measured
the output of all different industries and amount
consumed by individuals. Kuznets is hence
credited for providing the rough frame work of
what we today measure as national income or
GDP. The Second World War made the latter more
important. So the conventional GDP measure as
we know today was developed by economists
working under John Maynard Keynes in 1941
after the great depression which emphasised on
economic output.
Measuring National Income:
GDP theoretically can be viewed in three
different ways. First is the production approach
which adds the “value-added” at each stage
of production, where value-added is the total
sales subtracted by value of intermediate inputs
into the production process. Second one is the
expenditure approach adds up the value of
purchases made by final users. The third one
is the income approach sums the incomes
generated by production. The international
standard for calculating GDP is contained in the
System of National Accounts 1993, compiled by
the International Monetary Fund, the European
Commission, the Organization for Economic
Cooperation and Development, the United
Nations, and the World Bank. Real GDP is
calculated from nominal GDP by adjusting the
inflation in commodities using price deflator.
Alternatives to GDP:
The alternatives to measure growth in addition
to GDP were UK’s Office for National Statistics
(ONS) & Australian Bureau of Statistics. UK’s
Office for National Statistics (ONS) measures
economic well-being by an annual survey.
However ONS’s data hasn’t changed much since
2012. Certain important things like friendship,
sex, relationships enhance wellbeing but policy
making is difficult for these things. Australian
Bureau of Statistics includes indicators like
income and jobs, quality of the natural and
urban environment, work-life balance, health
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