As per the Gross Domestic Product of 2017, India is the sixth largest economy in the world. The list is topped by USA with GDP of about $ 19.39 trillion, while India has a GDP of $ 2.597 trillion. The health of any nation is measured with the help of some basic parameters like GDP, NDP, GNP, NNP etc. These are explained in layman language below.
GDP or Gross Domestic Product
The GDP or the Gross Domestic Product is the measurement of the final value of total goods and services produced in a country in a given financial year. Here the final value means that there is no further value addition in the goods. Currently, the GDP of India is 2.6 $ trillion which makes it the sixth largest economy in the world.
NDP or Net Domestic Product
There is a term called depreciation, which measures the total wear and tear of the machines and tools while carrying out the production. So, the NDP or Net Domestic Product is the net value which remains when we subtract the depreciation form the GDP. The rate of Depreciation varies from country to country. In India, the depreciation rates are decided by the Ministry of Commerce and Industry.
GNP or Gross National Product
When the GDP of a country is adjusted with factors like remittances, interest on external loans, grants received and given etc, then we get the Gross National Product. In the case of India, our GNP is generally less as compared to GDP as the net income from abroad remains negative due to interest payments on loans received.
NNP or Net National Product
When the subtract the losses due to depreciation from the GNP, what we get is the NDP. This is the purest form of the income of a nation. When we divide the NNP of a nation by total population of the nation, we obtain per capita income of the nation.
Click here to read about the Finance Commission of India.