INDIA GDP & GNP

Sukhdeep Singh

GDP is the total of all economic activity in one country. It measures the volume of production within a country·s borders. India·s GDP includes the profits of a foreign firm located in India even if they are remitted to the firm's parent company in another country. It does not correct for the portion of countries production carried out by using foreign-owned capital. for a financial year and not concerned of who owns the productive assets. For example.   .WHAT IS GDP  Gross domestic product .

MEASUREMENTS OF GDP    By Income By Expenditure By Consumption .

GDP FORMULA GDP = C + G + I + NX C = All private consumption G = All government spending I = Investment by businesses NX = The country·s net exports (total exports ² total imports) .

ECONOMY OF INDIA     Indian economy is 12th largest economy in the world India is the second fastest growing economy after China GDP of India is 8. .90% in the quarter of 2010 Service sector is the major source of economic growth.

GDP GROWTH RATE .

GROSS NATIONAL PRODUCT    The value of all final goods and services produced by a country·s factors of production and sold on the market in a given time period It is the basic measure of a country·s output. . Indian company doing economic activity in other country will be included in GNP.

GNP  GNP is calculated by adding up the market value of all expenditures on final output:   Consumption  The amount consumed by private domestic residents The amount collected by private firms to build new plant and equipment for future production The amount used by the government The amount of net exports of goods and services to foreigners Investment    Government purchases  Current account balance  .

GNP    GDP = Gross Domestic Product GNP = Gross National Product GNP = GDP + Net Factor Income from the Rest of the World .GDP VS.

LOCATION The difference between GDP and GNP comes down to the two factors: ownership and location. GNP measures economic output based on ownership. If the economic outputs are owned by Indian company.  . If economic output is occurred in India. then it is included in GDP. they are included in GNP ´whether the company is in India or in Foreignµ.OWNERSHIP VS.  GDP measures economic output based on location.

However. the General Motors plant is owned by a corporation based in United States. the output is not included in the Gross National Product (GNP) .EXAMPLE #1    General Motors owns a plant in India The plant·s output is included in GDP. because it is located in India.

GDP AFFECTED BY INFRASTRUCTURE DEVELOPMENT    While Infrastructure Growth was initiated in India. The result of opening the sector has increased at the rate of GDP at 8. This was done in order to boost the Infrastructure Sector in the country. .5% in 1996-1997 and the next year. this figure was 4.9%.6%. GDP was 3. GDP increased after the Indian government opened the Infrastructure sector to 100% foreign direct investment (FDI).

PROJECTED ELEVENTH PLAN SECTOR SHARE (%) Ports 4% Airports Storage 1% 2% Gas 1% Water Supply and Sanitation 7% Irrigation 12% Electricity 32% Railways 13% Telecom 13% Roads 15% .

Mint & Business Outlook etc. . Hindu Business. please start reading Economic Times.THANK YOU For more information.

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