The UPSC exam requires you to have knowledge about all the fields and areas. You must have complete information regarding the current happenings of the world, especially in India. UPSC exam preparation is highly required by the aspirants so that they can get deep acknowledgment and understanding of the significant topics.

Your preparation will make you worthy of achieving your dreams. If you want to grab information regarding Gross Fixed Capital Formation UPSC, you need to go through the content shared in this article. You can answer well in the examination and score maximum from the examiners. Let’s go ahead to grab the details.

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What is Gross Fixed Capital Formation(GFCF)?

Well, before understanding the complete details about GFCF, let’s first grab the fundamental information about it. Keep reading the content to acknowledge all the facts and knowledge. Gross fixed Capital Formation(GFCF) represents investment demand within the economy. As per RBI, GFCF refers to the mixture of gross additions to fixed assets (i.e. fixed capital formation) and changes in stocks throughout the enumeration amount.

Fixed asset refers to the development, machinery, and equipment. The Gross fixed capital formation(GFCF) has been enlarged by the virtual half-hour. Hence, because of this, the quantitative relation of GFCF to gross domestic product (GDP) was thirty-four point three percent, the very best in the last twenty-six quarters. However, tons of it absolutely was Government Capex (capital expenditure).

GFCF isn’t a measure of total investment, because only the worth of net additions to fixed assets is measured, and every one variety of monetary assets, further as stocks of inventories and other operational prices are excluded.

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Gross Fixed Capital Formation – UPSC Notes

Let’s get a hold on this topic to make your mark before the examiners. The more you are aware of the current happenings and scenarios, the more scores you will be able to fetch. GFCF is an indicator for gauging the mounted capital formation. A downward flight in gross fixed capital formation would indicate that the fixed capacities don’t seem to be being ramped up. The foremost vital exclusion from GFCF is land sales and purchases.

The first reason, aside from advanced valuation issues concerned with estimating the worth of land in a standard means, was that if a bit of land is sold, the overall quantity of land already existing, isn’t considered being enlarged thereby; all that happens is that the possession of identical land changes. Therefore, only the worth of land improvement is enclosed within the GFCF measure as a net addition to wealth. In special cases, like land reclamation from the ocean, a watercourse, or a lake (e.g. a polder), the new land will be created and sold wherever it didn’t exist before, adding to mounted assets.

The GFCF live continually applies to the resident enterprises of the national territory, and so if e.g. oil exploration happens on the open seas, the associated new fixed investment is allotted to the national territory within which the relevant enterprises are resident. This ratio is outlined as gross fixed capital formation divided by gross price added, in different words the share of GFCF in the gross product.

It provides a sign of how much of the overall issue’s financial gain is reinvested in new fixed assets. unremarkably that ratio is regarding 20–23% of gross added. Therefore, you need to prepare some notes on this essential topic and remember the facts about it to answer in the paper. It will help you to gain marks and ultimately achieve your goals.

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Therefore, we hope that this article has provided you with the best information regarding the most significant current topic for your UPSC exam preparation. You must look forward to more relevant information regarding different current affairs topics to make UPSC notes and revise them before your examination. If you are searching for more relevant knowledge for your UPSC exam, you need to visit the UPSC Pathshala website. The website will also provide you with the opportunity to meet the specialists and get the learnings for your test from the biographies. Therefore, make the right choice of visiting the website and making your dream come true! We wish you good luck with your exam!

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Shilpa is a professional web content writer and is in deep love with travelling. She completed her mass communication degree and is now dedicatedly playing with words to guide her readers to get the best for themselves. Developing educational content for UPSC, IELTS aspirants from breakthrough research work is her forte. Strongly driven by her zodiac sign Sagittarius, Shilpa loves to live her life on her own notes and completely agrees with the idea of ‘live and let live. Apart from writing and travelling, most of the time she can be seen in the avatar of 'hooman' mom to her pets and street dogs or else you can also catch her wearing the toque blanche and creating magic in the kitchen on weekends.

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