Question

At which among the following prices, Indian GDP is estimated by the Central Statistical Organisation?
(A) Constant prices
(B) Current prices
(C) Historical prices
Choose the answer from the following choices:

• A. A, B
• B. A, B and C
• C. B, C
• D. None of these

Hint:

GDP is reported in two standard ways, constant prices and current prices; historical prices is an accounting term, not a GDP measure.

Answer 1

The Correct Option is A

The Central Statistical Organisation (CSO) is the government body that measures India's Gross Domestic Product (GDP). It reports GDP in two standard ways: at "constant prices", where the value of goods is measured using a fixed base year, so we can compare real growth without the effect of price rise, and at "current prices", where the value is measured using the prices of the same year, which includes the effect of inflation. "Historical prices" is an accounting term used for valuing fixed assets in a company's books, and it is not a way the CSO reports national GDP. Let's check the options with this in mind.

1. A, B: This picks constant prices and current prices, both of which are the real, standard ways the CSO reports GDP.
2. A, B and C: This wrongly adds historical prices, which is not a GDP measurement basis used by the CSO.
3. B, C: This drops constant prices, which is one of the two real measures, and wrongly keeps historical prices.
4. None of these: Not needed, since option (1) is correct.

Since the CSO always reports GDP at both constant prices (for real growth) and current prices (for nominal value), the correct choice is "A, B".

Let's summarize:

• Constant price GDP removes the effect of inflation and shows real growth.
• Current price GDP uses that year's own prices and shows nominal value.
• Historical prices is not a GDP reporting method, so option C does not belong.

The answer is option (1), A and B.