GNP-Gross National Product

TANMOY MUKHERJEE INSTITUTE OF JURIDICAL SCIENCE

Dr. Tanmoy Mukherjee

Advocate

 

 

GNP-

Tanmoy Mukherjee

Advocate

Gross National Product (GNP) is the total money value of all final goods and services produced by the normal residents (Nationals) of a country during a financial year, irrespective of whether production takes place within the domestic territory or abroad.

-The main idea in GNP is ownership of factors of production not location. 

Normal resident-

-Indian workers in the USA→ Included in India's GNP.

-Foreign workers temporarily in India→ excluded from India's GNP.

Formula of GNP-

GNP = GDP + Net Factor Income from Abroad (NFIA)

Components of GNP-

Example-

 GDP = Rs. 1000 Crore

 Income earned by Indians Abroad = Rs. 120 Crore.

 Income earned by foreigners in India = Rs. 80 Crore

GNP = 1000 + (120 - 80)

= 1000 + 40

  = 1040 Crore

Importance of GNP-

Limitations of GNP-

GNP v/s National Income-

National Income = NNP at Factors Cost

So,

National Income = GNP - Depreciation - Indirect taxes + Subsidies