GNP And NNP

GNP And NNP

GNP And NNP are gross nation product and net national product

Gross National Product (GNP)

• The value of all the goods and services produced by the citizens of a country in a
  given year, regardless of where they are located.
• It includes the income earned by the country’s residents both at home and abroad.
• It excludes the income earned by foreign residents who are living in the country.
• GNP = GDP + NFIA
  NFIA (Net Factor Income from Abroad) = Income received from abroad – Income paid to abroad.
  (Gross = Total; Net = Gross minus deductions).

	GDP	GNP
indian company working in india	yes	yes
indian company working abroad	no	yes
indian citizen working abroad	no	yes
foreign citizen working in india	yes	no
foreign company working in india	yes	no

Net Factor Income from Abroad
Net compensation for employees

	Foreigner working in india	Indian working abroad	Net compensation
compensation	₹20000	₹50000	₹30000

• Net income from entrepreneurship and property.
• Net retained earnings of resident companies abroad.

Net National Product (NNP)

• Net national product measures the value of all the goods and services produced by the
  citizens of a country, regardless of where they are located. It includes both domestic and
  foreign production by the country’s residents.
• It deducts the depreciation of the fixed capital used in the production process from the
  gross national product (GNP).
• NNP = GNP – Depreciation
• (Gross = Total; Net = Gross minus deductions)

Limitations/Issues

• Lack of data availability.
• Delay in data collection and processing.
• Presence of non-monetized consumption.
• Size of underground economy.
• Ignorance of development, environmental impact, etc.