GDP Vs GNP

Wanna know about your country's economy.?? Eager to know about how the economy is measured.?? The terms  GDP, GNP related to economy make us much confusing..Of course, we all have read these in our 9th, 10th standard economics..But it is only for marks not much knowledge had been developed at that stage.. Let us know about these terms in a simplified & well- understandable language..

What is GDP.??

Length is measured in centimeters, meters, etc.. In the same way, the economy of a country will be measured in GDP(Gross Domestic Product) & GNP(Gross National Product). In simpler terms, the GDP can be defined as the value of goods & services sold in a country in a period of one year is known as GDP.. The goods here refers to the finished goods.. Services can be banking services, educational services, medicare services, etc..

To manufacture a laptop we need a motherboard, processor, ICs, inbuilt mouse, keyboard & many more.. All these combine together and give us a finished product called laptop..The value of the sold laptop is only considered in the GDP..The individual goods cannot be included in GDP as they are not the finished ones..

The GDP can be calculated according to the value it is sold in the market.. For example, a product manufactured in India sells it at a cost of Rs.150 in India, then this Rs.150 is added to India's GDP.. Suppose the same Indian company had an outlet in any other country & the same product will be sold for Rs.250 and this value will also be added to India's GDP..

What is GNP.??

GNP(Gross National Product) can be simply defined as the value of goods & services that are manufactured & produced in India only..

Suppose a Pepe jeans outlet which is an England company has opened in India..The value of the sold goods will be included in the GDP of both Indian & England countries and excluded in the GNP.. In this context, profits go to England company itself.. We don't get benefitted too.. But why do our country allows other countries outlets here.?? The only reason for this is, it increases the employability among the citizens and improves the standard of the living..

The main reason behind India's lowest GDP is the citizens of India mostly use the videshi products rather than swadeshi ones.. Yes, we use outer products because we find better quality, competitive prices, and durability.. Firstly, to raise India's economy & growth manufacturing units to be established in our country and then promoting them wisely with competitive prices & best quality, finally opening outlets in other countries.. In this way, we can raise India's GDP.. This creates employability, worldwide recognition, and finally leads to an increment of Indian rupee.. I hope the swadeshi movement be repeated again and may our country be stable financially soon..

          

                                                                           -- By Mounika Perumalla