It is the sum of the Monetary value of all final goods and services produced in the country per year.
Domestic – It mean Territorial criteria.
GDP – Gross domestic product.
Value addition concept is used in GDP.
Includes – Entities of India though in other countries like ships, airlines and Indian Embassy in other countries.
Excludes Embassies of other countries in India.
Two important things that always keep in consideration.
Market Price – It is showroom price it includes Transportation, Indirect taxes, The salary of the worker, Showroom of maintenance cost and some amount of marginal profit
It is the net value of GDP after deducting depreciation (wear and Tear).
Every asset except human beings goes for depreciation in the process of their uses.
In India, Ministry of commerce and Industry decides and announces the rates by which assets depreciate.
has to be always lower then GDP for the same year
Developments such as “Ball-bearing” “Lubricants” etc. all innovated to Minimise the levels of deprecation.
GNP-Gross National product
It is the Monetary value of all final goods and services produced by residents of a country in a year.
National product = Domestic product (+/-) NFIAD (NFIAD – Net factor income from abroad)
National product will be lesser that domestic product if the income of Indian Nationals abroad is lesser than that of Income of foreigners in India and viceversa.
National disposable income = Net National product at market prices+other current transfer from rest of world
the idea behind National disposable income is that it gives an idea of what is the maximum amount of good and domestic economy has its disposal. Current transfer from rest of the world include items such as gifts, aids etc
Private income = Factor income from net domestic product accruing to the private sector +national debt interest +net factor income from the abroad + current transfer from the government +other net transfers from the rest of the world
GDP DEFLATOR = GDP/gdp
Where GDP stands for nominal GDP and gdp stands for real GDP
Sometimes Deflator is also denoted in percentage terms. In such case Deflator=GDP/gdp×100
TO READ: PART-I