Question

On the basis of the following hypothetical data:

Year	Nominal GDP (in ₹ crores)	Real GDP (Adjusted to base year prices, in ₹ crores)
2020 – 21	\( 3{,}000 \)	\( 5{,}000 \)
2022 – 23	\( 4{,}000 \)	\( 6{,}000 \)

Calculate the percentage change in Real Gross Domestic Product (GDP) in the year 2022 – 23 using 2020 – 21 as the base year.

Hint:

To calculate the percentage change in Real GDP, always use the Real GDP values adjusted to the base year prices.

Answer 1

The formula for calculating the percentage change in Real GDP is: \[ \text{Percentage Change in Real GDP} = \frac{\text{Real GDP in 2022-23} - \text{Real GDP in 2020-21}}{\text{Real GDP in 2020-21}} \times 100 \] From the data, we have: \[ \text{Real GDP in 2022-23} = 6,000 \quad \text{and} \quad \text{Real GDP in 2020-21} = 5,000 \] Substituting these values into the formula: \[ \text{Percentage Change in Real GDP} = \frac{6,000 - 5,000}{5,000} \times 100 = \frac{1,000}{5,000} \times 100 = 20\% \] Therefore, the percentage change in Real GDP in the year 2022 – 23 is 20\%.