GDP Definition

GDP stands for Gross Domestic Product, the total worth estimated in currency values of
a nation’s production in a given year, including service sector, research, and
development. That translates to a sum of all industrial production,
work, sales, business and service sector activity in the country. Usually this is calculated
over a period of one year, but there may be analysis of short and long term trends to be
used for economic forecast. Gross Domestic Product can also be calculated on a per
capita (or per person) basis to give a relative example of the economic development of
nations.
GNP Definition
GNP stands for Gross National Product. In general terms, GNP means the total of all
business production and service sector industry in a country plus its gain on
overseas investment. In some cases GNP will also be calculated by subtracting the
capital gains of foreign nationals or companies earned domestically. Through GNP an
accurate portrait of a nation’s yearly economy can be analyzed and studied for trends
since GNP calculates the total income of all the nationals of a country. This gives a
far more realistic picture than the income of foreign nationals in the country as it is
more reliable and permanent in nature. Gross National Product can also be calculated
on a per capita basis to demonstrate the consumer buying power of an individual from
a particular country, and an estimate of average wealth, wages, and ownership
distribution in a society.
Here is a video of economist Phil Holden explaining the difference between GNP and
GDP and talking about how they are measured and how accurate they are.

GDP = consumption + investment + (government spending) + (exports − imports). GNP =

GDP + NR (Net income inflow from assets abroad or Net Income Receipts)
Net factor income from abroad refers to the difference between the factor income
received from the rest of the world and the factor Income paid to the rest of the world.
Net Factor Income from Abroad = Net Compensation of Employees + Net Income from
Property and Entrepreneurship + Net Retained Earnings.

To calculate the GNP for a nation, the following factors are considered:
 Consumption expenditure.
 Investment.
 Government expenditure.
 Net exports (Total exports minus total imports)
  Net income (Income earned by residents in foreign countries minus income earned
by foreigners in the country)
GDP growth is mainly influenced by labor productivity and total hours worked by the labor
workforce of a country.

Factors Influencing the Growth of GDP of

India
 The pandemic: The pandemic has resulted in India as a global leader of vaccines.
Vaccine manufacturing has started on a very large scale in different parts of India, which
resulted in the expansion of export to other countries, which directly resulted in the rise of
India GDP.

 Consumer Demand: During the COVID-19 consumer demand has decreased which
resulted in the disruption of GDP but now spread of virus is under control, which is
expanding the GDP of India.

 Investment: The key player which influences GDP of India is personal and private
investment. As the uncertain risks reduce in the economy which results in a better
environment to invest in, the businesses.