What is GDP and GNP

What is GDP and GNP | Difference between GDP and GNP

What is GDP and GNP : The GDP of any country determines the international economy of that country. GDP contributes a lot to the country’s economy, a country with a strong GDP also has a strong economy. India is a developing country but in today’s time our economy is competing with the developed nations. Recently G7 meeting of world’s largest economies and powerful countries was held in the year 2019. India was also invited as a guest at the G7 Summit .

What is GDP and GNP
What is GDP and GNP

According to experts, India was also invited to this summit held in France due to the fast growing economy and an excellent GDP economy. GNP is also calculated along with GDP to calculate the rate of economy. Today we will tell you through our post what GNP and GDP are and also GDP or GNP Me Kya Antar Hai.

What is GDP ?

GDP is the market value of consumer goods and services in any country. It serves to measure the total output of the country, and along with it is the best way to understand the country’s economy. Under this, both the amount of production that has been produced in a country in a year as well as how much service you have consumed is calculated. GDP is usually calculated on an annual basis but it can also be calculated on a quarterly basis.

GDP Full Form: GROSS DOMESTIC PRODUCT

The government releases GDP estimates every three months and annually. GDP is related to the region in which income is generated. It is the market value of the total production generated in a nation in a year. GDP also pays attention to where production is being received and not to who is producing it. GDP measures all domestic products. Whatever the nationality of production units, GDP includes all private and public consumption as well as foreign balances of investment and trade.

How is GDP calculated ?

GDP = Consumption + Consumption + Gross Investment + Government Spending + [Exports – Imports]

GDP = C + I + G + (X − M)

Consumption

Most household expenses include household expenses in consumption, such as rent, food, medical expenses, etc. A new home is not included in consumption.

Gross Investment

It is the expenditure on consumer goods and services, it measures the total expenditure incurred by all institutions on goods and services within the domestic boundaries of the country.

Government Spending

This includes all types of government expenditure such as salary of government employees, purchase of arms for the army and investment made by the government, etc.

Export

Exports count goods or services produced in consumption for other countries, and added to GDP.

Exports

This includes imported goods and services, imports are deducted to calculate GDP.

GDP Of India 

The economy of India is known as the developing market economyAccording to nominal GDP, India is the fifth largest economy in the world and India is the third largest country by purchasing power parity (PPP). According to the IMF, India ranks 142nd out of GDP in 2018 and 119th in GDP (PPP) per capita based on per capita income. Since the beginning of the 21st century, annual average GDP growth has grown from 6% to 7%, and from 2014 to 2019, India is the world’s fastest growing major economy, overtaking China.

GDP of India 2019 / GDP of India 2019

At present, India GDP growth rate is at the lowest level of the last six years and the country is facing recession. As per the GDP growth rate, the GDP rate was 5.8% at the end of the last financial year, but now India’s GDP has fallen to only 5% in 2019.

GDP Calculation In India

Agriculture, industry, and service in India are the three main parts, in which GDP is determined on the basis of increase or decrease in production. GDP in India is calculated every quarter (three months).

If we say that the GDP of the country is increasing by three percent every year, then it should be understood that the economy is growing at the rate of three percent.

But most of the figures do not include the inflation rate, the GDP figure is based on the growth rate of production in the major production sectors of the economy.

What is GNP ?

GNP is the value of all goods and services created by the residents and businesses of the country. GNP calculates the value of all products manufactured by domestic businesses. If GDP is deducted from income that has been generated within the country but is available to foreign countries (received by the country), and with this reduced income is added abroad then GNP is obtained. GNP does not count any income earned by foreign residents or businesses.

GNP Full Form: GROSS NATIONAL PRODUCT

GNP Formula

GNP (Gross National Product) = Consumption + Investment + Government Spending + X [Export (Imports) – Import (Exports)] + Z (Net income earned by domestic residents from foreign investment – Domestic Net income earned by foreign residents from investment)

GNP (Y) = C + I + G + X + Z

GNP Per Capita

GNP Per Capita is the dollar value of the final production of a country’s goods and services in a year, divided by its population.

What Is GDP Per Capita

GDP Per Capita is also divided by mid-year population. This growth is calculated from constant price GDP data in local currency.

GDP Or GNP Me Antar

Both GDP and GNP represent the national production and income of the economy. The main difference is that GNP (Gross National Product) takes into account net income receipts from abroad.

  • GNP includes net foreign income rather than net imports and exports. Generally speaking, GNP includes net foreign investment income in comparison to GDP.
  • GDP measures all domestic products irrespective of the nationality of its manufacturing units and GNP (Gross National Product) measures the value of output generated by the ‘nationality’ of a region.
  • GDP refers to the level of domestic production, while GNP measures the level of production of an individual or corporation of a country.

What is GDP and GNP : A strong economy and excellent GDP not only benefits the government, but also the general public greatly benefits from it. The goal of the Government of India is to become the largest economy in the world in the next few years, making the GDP even better. If you like GDP INFORMATION, then do not forget to share it, and if you have any question related to it, then you can ask us in the comments, we will surely give you the answer.

About the author

Niraj Mishra is the Blogging Expert and the Founder of ‘Trending Clash’. He has a very deep interest in all current affairs topics whatsoever. Well, he lives in Delhi. Who loves to be a self dependent person. As an author, I am trying my best to improve this platform day by day. His passion, dedication and quick decision making ability make him stand apart from others.

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