Concepts of GDP,NDP,GNP,NNP for National Income (in Hindi)

Lesson 3 of 10 • 64 upvotes • 10:09mins

Vikas Kumar Singh Tomar

Income is the most frequently used term in Economics. Income level is the most useful tool which is used to determine the standard of living of the people in a Country. Actual meaning of National income is monetary value of all final goods and services produced by the residents of a Country. To calculate net national product, depreciation of plant and machinery used in the production process is deducted. National income is calculated for a particular period, normally a financial year (In India, financial year means April 1 to March 31 of next year). Net factor income from abroad is added to the domestic product to get the value of National Income. National Income = C + I + G + (X – M) Where, C = Total consumption expenditure I = Total investment expenditure G = Total government expenditure X – M = Export - Import Different concepts of National Income Gross Domestic Product (GDP) Gross domestic product is the value of all final goods and services produced within the boundary of a nation during one year. In India one year means from 1st April to 31st March of the next year. GDP calculation includes income of foreigners in a Country but excludes income of those people who are living outside of that country. Net Domestic Product (NDP) NDP is calculated by deducting the depreciation of plant and Machinery from GDP. NDP = Gross Domestic Product - Depreciation Gross National Product (GNP) GNP is the value of all final goods and services produced by the residents of a country in a financial year (i.e., 1st April to 31st March of the next year in India). While Calculating GNP, income of foreigners in a country is excluded but income of people who are living outside of that country is included. The value of GNP is calculated on the basis of GDP. GNP = GDP + X - M Where, X = income of the people of a country who are living outside of the Country M = income of the foreigners in a country Net National Product (NNP) Net National Product (NNP) in an economy is the GNP after deducting the loss due to depreciation. NNP = GNP - Depreciation NNP at Factor Cost: It is the value of NNP when the value of goods and services is taken at the production cost. NNP at Market Price: It is the value of NNP at consumer cost. NNP at market cost = NNP at factor cost + Indirect taxes – Subsidies