Difference between GDP & GNP
GDP (Gross Domestic Product) is defined as the total market value of all final goods and services produced within the country’s geographic border in a given period of time (usually a calendar year).
GDP measures economic output based on location.
An American company with a plant in
GNP (Gross National Product) measures the total amount of goods and services that a country's citizens produce regardless of where they produce them.
GNP measures economic output based on ownership
An American firm operates a plant in Indian, then the profits that the firm earns would contribute to
Points to remember while calculating India GDP
- There are different sectors contributing to the GDP in
such as agriculture, textile, manufacturing, information technology, telecommunication, petroleum, etc. India
- The different sectors contributing to the India GDP are classified into three segments, such as
- Primary or Agriculture sector,
- Secondary or Manufacturing sector and
- Tertiary or service sector.
The components used to calculate GDP include:
-- Durable goods (items expected to last more than three years)
-- Nondurable goods (food and clothing)
-- Services & etc
-- Nonresidential (spending on plants and equipment), Residential (single-family and multi-family homes)
-- Business inventories & etc
-- Exports are added to GDP
-- Imports are deducted from GDP
A common equation used to calculate GDP is as follows
GDP GROWTH RATESQuarterly GDP for Q3 of 2007-08 was expected Rs. 8, 24,075 crore, as against Rs. 7, 60,386 crore in Q3 of 2006-07, showing a growth rate of 8.4 per cent over the corresponding quarter of previous year.
Recent World Bank Figures for GDP…
The Indian economy is the 12th largest in the world. That is,
However, in terms of purchasing power parity,
[Purchasing power parity (PPP) is an economic theory that estimates the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency's purchasing power.]
The American GDP is at $13.812 trillion, making it the world's largest economy. It accounts for more than 25 per cent of the entire world's GDP! In terms of purchasing power parity too, the
Its GDP is at $2.728 trillion. In purchasing power parity terms, the
The French GDP is at $2.563 trillion, making it the world's sixth largest economy; but in terms of PPP, it is the world's 8th largest (GDP in PPP terms, $2.054 trillion).
The Canadian GDP stands at $1.326 trillion, making it the world's ninth largest economy. In PPP terms, however, it stands 14th in the world. Its GDP in PPP terms is at $1.178 trillion.
The Brazilian economy too has been growing at a scorching pace. It is the world's 10th largest economy with a GDP of $1.314 trillion. But in terms of purchasing power (GDP - $1.834 trillion), it is better placed at number 9.