Is GDP a good tool of measurement?

This is the question which has been contentious for many economists and market analysts. But there is no proper book of articles which can prove that GDP is good tool for measurement of the growth of the economy or not. Now, the first question that arises is, what is GDP?

GDP stands for Gross Domestic Product. GDP is the final value for the goods and services produced in the country. For e.g. If someone hires a maid servant and pays her salary, the GDP will rise. But if you get married to the maid servant and stop giving her salary, then the GDP will go decrease.  This is the first major lacuna of the tool. Housewives are not paid for the services, but the value of the work they are generating is not accounted. Second lacuna is if the vegetables and fruit farmer is growing in his/her garden for domestic consumption, it is not added in the value of the GDP. This means all value additions for self-consumption, which are not available in the market, are not accounted in GDP. Using GDP as a tool for measurement of the country actually makes sense because it’s essentially a measure of the buying power a nation has over a given period of time. GDP is also used as the indicator of a nation’s overall standard of living, as the GDP rises; the standard of living tends to improve.

This is still debatable whether GDP is the right tool for measuring the growth of the economy. It may be true that GDP is not the perfect way to measure the country’s growth. But among all the alternatives, this tool is the least “inaccurate” method to compute the growth of the country. 
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Author: Aman Bagaria
Kautilya 
IBS Mumbai