Current Affairs - Banking - Discussion

The Reserve Bank of India (RBI) has decided to use Gross Domestic Product (GDP) instead of Gross Value Added (GVA) to measure economic activity in India. Viral Acharya, deputy governor of RBI said that, this change has been done to confirm with international practice and for ease of comparison. Worldwide, the performance of economies is measured in terms of GDP. Multilateral institutions, international analysts and investors also follow this approach. GVA gives the picture of the state of economic activity from the producers' side or the supply side. GDP provides the picture from the consumers' side or the demand side. The Central Statistical Office has been employing GDP as the main tool to measure economic activity since January 2015.