Table of contents |
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Gross Domestic Product –GDP |
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Net Domestic Product (NDP) |
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Net National Product (NNP) |
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Cost and Price of National Income |
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Revised Method |
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Definition and features of GDP, NDP, GNP, NNP etc.
Methods of GDP calculation.
Costs and Prices of GDP.
Revised Methods
Top 10 Countries in 2024
NDP = GDP – Depreciation
GNP = GDP + Net Factor Income from Abroad (NFIA)
Net Factor Income from Abroad of India = Factor income earned from abroad by Indians – Factor income earned by foreigners in India.
Net National Product (NNP)
Net National Product = GNP – Depreciation
Net National Product (NNP) at factor cost is considered as ‘National Income’ of India.
Per Capita Income
NNP, or Net National Product, is the Gross National Product (GNP) after deducting the loss due to depreciation.
Mathematically, NNP can be expressed as:
NNP = GNP - Depreciation
or
NNP = GDP + Income from Abroad - Depreciation
National Income Indicator:
Purity of National Income:
Per Capita Income Calculation:
Impact of Depreciation Rates:
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Ramesh Singh Summary: GDP, GNP, NDP, NNP & Revised Methods
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In summary, NNP is a crucial economic indicator that provides insights into a nation's income, accounting for depreciation and influencing metrics like Per Capita Income. Understanding the implications of depreciation rates on NNP is essential for analyzing and comparing the economic performance of different countries.
When measuring the economic health of a nation, one essential metric is its national income. However, determining national income involves various considerations, including the costs and prices used in the calculation. Two critical factors in this calculation are the choice between factor cost and market cost, as well as between constant price and current price.
Factor Cost vs. Market Cost:
Constant Price vs. Current Price:
In summary, while calculating national income, decisions regarding whether to use factor cost or market cost and constant price or current price depend on the desired economic analysis. Understanding these concepts helps in interpreting national income data accurately and assessing economic trends effectively.
In 2015, the Central Statistics Office (CSO) released revised data for the National Accounts, which involved significant changes in methodology and coverage. These changes aimed to enhance the accuracy and comprehensiveness of economic data, aligning with international standards and reflecting the evolving nature of the Indian economy. Let's explore the key modifications made by the CSO:
The revisions made by the CSO in 2015 aimed to modernize and improve the accuracy of National Accounts data. By updating the base year, aligning methodology with international standards, and enhancing sector coverage, the CSO ensured that economic data reflects the dynamic nature of the Indian economy, providing policymakers and analysts with reliable insights for informed decision-making.
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1. What is the difference between Gross Domestic Product (GDP) and Net Domestic Product (NDP)? | ![]() |
2. How is Net National Product (NNP) calculated and why is it important? | ![]() |
3. What is the Cost and Price of National Income in the context of GDP and NNP? | ![]() |
4. What are the key differences between the traditional and revised methods of calculating national income? | ![]() |
5. How do revisions in national income calculation methods impact economic policies and decision-making? | ![]() |