Gross domestic product

The total value of goods and services produced in an economy over a period.

An economy growing from ₹300 lakh crore to ₹320 lakh crore has grown 6.7% in nominal terms, and the real growth is that figure less inflation.

The measure can be built three ways, from production, from expenditure and from income, and the three should agree. Where they do not, the gap is a statistical discrepancy that is itself informative in emerging economies.

For company analysis its use is narrow and real. Most consumer categories grow at some multiple of nominal economic growth, and a forecast implying otherwise for a long period needs an argument.

Output, not activity. The distinction matters.

The expenditure decomposition is the one most useful to a company analyst, because it names the demand a business actually sells into. Private consumption, government spending, gross fixed capital formation and net exports each drive different sectors, and they do not move together. A cement maker cares about capital formation and about government infrastructure spending; a consumer staples company cares about private consumption and about rural incomes within it. Reading the composition rather than the headline is what turns a macro number into something a sector forecast can use.