GNP NNP

What is GNP?

-    Gross National Product (GNP) is one of the measures of national income for a given country’s economy
-    It represents the income earned by the nationals of a country, irrespective of their physical residence
-    While GDP is the total value of goods and services produced in the country, GNP also takes into account the value of goods and services offered by Indian companies outside the boundaries of the country
-    Adding the income of a country’s nationals from abroad and subtracting the income of foreign nationals in that country results in ‘Net Income from Abroad’
-    Hence GNP = GDP ± Net Income from Abroad
o    If Net income from Abroad is +ve, then GNP > GDP (where profits earned by nationals of country ‘X’ are higher than the profits earned by foreign nationals residing in country ‘X’)
o    If Net income from Abroad is –ve, then GDP > GNP
o    Value of a product said in country ‘X’ produced by a firm from country ‘Y’ is included in GDP of country ‘X’, however, profits earned in the sale of the product (even if in country ‘X’) are included in GNP of country ‘Y’

GNP = GDP ± Net Income from Abroad











What is NNP?

-    Net National Product (NNP) represents income after taking into account any future needs
-    It is calculated by making adjustments in GNP for description
-    NNP = GNP – Depreciation (of plan and machinery)
-    Depreciation represents the reduction in value of plant and machinery over a period of time.  Every unit of a product which is produced today reduces the power of a machine to produce the same quantity of the product in the future.

NNP = GNP – Depreciation

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