What Is Gross National Product (gnp) In An Indian Economy?



The total worth of goods and services produced by a nation over the course of a year is referred to as its gross national product (GNP). A country's national income can be determined by looking at its gross national product (GNP). The total value of all commodities and services produced by a nation's people and businesses, wherever they may be, is included in GNP. GNP stands for gross national product.
What Is Gross National Product (GNP) In An Indian Economy?

What Is Gross National Product?

•    The gross national product (GNP) of a nation is its domestic investment income less international citizens' domestic income.
•    In other words, regardless of where an item or service is produced, its complete value is produced by businesses and its population.
•    The gross national product (GNP) is calculated as the sum of gross domestic product (GDP) and net income from foreign investments. i.e., the GNP includes investments made by businesses and people within the nation as well as those made elsewhere.
•    It also considers the worth of goods produced by domestically based industries.
•    GNP excludes income earned by foreigners living there as well as any goods produced in domestic factories by foreign companies. 

Gross National Product (GNP) Calculation:

To prevent double counting of intermediate products, the GNP calculation only considers the final commodities and services.
When estimating a nation's GNP, the following factors are taken into consideration:
•    Consumption Expenditure 
•    Investment
•    Total exports minus total imports equals net exports.
•    Net income is the difference between the country's domestic income and the money received by foreign nationals living there.
The mathematical equation for computing GNP is as follows:
•    GNP includes the production of goods like machinery, automobiles, agricultural products, and equipment as well as some services like advising, training, and medical care.
•    The price of the final product includes the cost of providing the services, thus it is not computed separately.
•    When a citizen has dual citizenship, the computation of GNP per capita, which is utilized for country-to-country comparisons, becomes difficult.
•    In this case, their earnings are double counted since they are treated as GNP in each of the many countries.

Example of GNP

•    Think about a nation where the GDP is higher than the GDP of the domestic economy.
•    This indicates that through their foreign operations, the nation's individuals, businesses, and companies are bringing in net inflows.
•    As a result, an increase in GNP might be a sign that a nation is growing its international business, commerce, or production.

Importance of GNP

•    GNP is viewed by economists as a crucial economic statistic. They utilize it to develop solutions for fiscal issues like inflation and poverty.
•    When income is calculated per person, globally, GNP is a much more reliable measure than GDP.
•    The data from GNP (Balance of Payments) is used to analyze the BoP. In some nations or organizations, like the European Union, economists use GNI, or gross national income.
•    The Gross National Product (GNP) is the total value of goods and services produced by a nation's citizens in a given year.
•    It is not confined to one area. The GNP of India is less than the GDP, as can be shown. Foreign currencies have fluctuating values.


•    The calculation of GNP is impacted by changes in a foreign currency's value.
•    When determining whether an economy is growing or shrinking, GNP is useless.
What Is Gross National Product (GNP) In An Indian Economy?

GDP Versus GNP

•    The financial stability of a country and other multinational firms is often discussed in the Gross National Product (GNP).
•    But it doesn't reveal anything about how the country's economy is doing.
•    Use the gross domestic product (real or nominal), which measures production inside a country irrespective of who creates it.


The gross national product (GNP) is an estimation of the total value of all finished goods and services produced over a specific time period using the production equipment owned by the citizens of that nation. GNP is calculated using a variety of data, including personal consumption expenditures, private domestic investment, government spending, net exports, and any income gained by locals from foreign investments, minus income earned within the domestic economy by foreign residents.

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