NNP-Net National Product

TANMOY MUKHERJEE INSTITUTE OF JURIDICAL SCIENCE

Dr. Tanmoy Mukherjee

Advocate

NNP-

Tanmoy Mukherjee

Advocate

Net National Product (NNP) represents the Net value of goods and services generated by the nationals of a country during a year after allowing for the wear and tear of capital assets.

Unlike GDP or GNP, NNP reflects sustainable income because depreciation is deducted.

-Only the Surplus over replacement cost is considered real income.

Formula Relationship-

GDP→ GNP→ NNP

GNP = GDP + NFIA

NNP = GNP - Depreciation

Therefore, NNP = GDP + NFIA - Depreciation.

NNP at Factor cost = National Income

Example-

GDP = Rs. 2000 Crore

NFIA = Rs. 150 Crore

Depreciation = Rs. 200 Crore

Indirect taxes = Rs. 120 Crore

Subsidies = Rs. 40 Crore                

GNP = 2000 + 150 = 2150

GNP ^MP  = 2150 - 200 = 1950

NNP ^FC  = 1950 - 120 + 40 = 1870 Crore   

Importance of NNP-

Limitations of NNP-