INDIAN ECONOMY

GNP Gross National Product (GNP)  Gross National Product (GNP) is the GDP of a country added with its ‘income from abroad’. Here, the transboundary economic activities of an paeconomy is also taken into account. The items which are counted in the segment ‘Income from Abroad’ are: (i) Private Remittances: This is the net outcome of the money which inflows and outflows on account of the ‘private transfers’ by Indian nationals working outside of India (to India) and the foreign nationals working in India (to their home countries). On this front India has always been a gainer- till the early 1990s from the Gulf region (which fell down afterwards in the wake of the heavy country-bound movements of Indians working there due to the Gulf War) and afterwards from the USA and other European nations. As per the World Bank, in 2019 too, India remained world’s top recipient of remittances (US $80 billion) followed by China (US $67 billion), Mexico (US $34 billion) and Philippines (US $26 billi...

 NDP Net Domestic Product Net Domestic Product (NDP) is the GDP calculated after adjusting the weight of the value of ‘depreciation’. This is, basically, net form of the GDP, i.e., GDP minus the total value of the ‘wear and tear’ (depreciation) that happened in the assets while the goods and services were being produced. Every asset (except human beings) go for depreciation in the process of their uses, which means they ‘wear and tear’. The governments of the economies decide and announce the rates by which assets depreciate (done in India by the Ministry of Commerce and Industry) and a list is published, which is used by different sections of the economy to determine the real levels of depreciation in different assets. For example, a residential house in India has a rate of 1 percent per annum depreciation, an electric fan has 10 percent per annum, etc., which is calculated in terms of the asset’s price. This is one way how depreciation is used in economics. The other way it is us...

 NATIONAL INCOME Measuring progress has been a major riddle for experts. Income as an indicator of progress was tried by many before the idea of the gross domestic product (GDP) was put forward by the US economist Simon Kuznets in 1934. The method tries to calculate (account) a country’s income at domestic and national levels—in gross and net forms—having four clear concepts (GDP, NDP, GNP, and NNP)—a brief and objective overview is presented below. GDP Gross Domestic Product (GDP) is the value of all final goods and services produced within the boundary of a nation during one year period. For India, this calendar year is from 1st April to 31st March. It is also calculated by adding national private consumption, gross investment, government spending, and trade balance (exports-minus-imports). The use of the exports-minus-imports factor removes expenditures on imports not produced in the nation and adds expenditures of goods and services produced which are exported but not sold with...

 SANTIAGO CONSENSUS This is yet another alternative to the Washington Consensus. Put forward by the then World Bank group President James D. Wolfensohn (in Santiago) for the developing countries. Core idea of this model is inclusion which should not be only economic but social too. This way, this is a socio-economic development model and is bound to have its local characteristics. This way,it looks similar to the Beijing Consensus which also includes the social overtones. In addition to financial resources the World Bank proposed to harness the incredible power of the information technologies and new spirit of openness and partnership (under the spell of rising globalisation) to make knowledge of global best-practice in development accessible to all. World Bank started building an internal architecture of a ‘knowledge bank’ for the purpose. This proposal from the World Bank inspired the world governments to focus more on aspect of inclusive socio-economic growth. We see this happen...

 BEIJING CONSENSUS BEIJING CONSENSUS Economic rise of China since mid-1980s needs no introduction. Whether this rise was led by any conscious development model has been an issue of scholarly debate. Finally, the idea of Beijing Consensus was forwarded by Joshua Cooper Remo in 2004.        Also known as Chinese Model of economic development, this refers to the policies which were followed by Deng Xiaoping since 1976 (the year Mao Zedong died). This model is believed to be forwarded as an alternative to the Washington Consensus (i.e., an anti-Washington Consensus view) for the developing countries. Over the time experts interpreted this model in different ways rather it is believed to be based on three main pillars- 1. Constant experimentation and innovation; 2. Peaceful distributive growth with gradual reforms; 3. Self-determination and inclusion of selective foreign ideas . The model received higher attention in wake of the great recession hitting the western ec...

 WASHINGTON CONSENSUS WASHINGTON CONSENSUS It is a set of reform policy package which was suggested by the International Monetary Fund, World Bank and the US Department of the Treasury (i.e., the US finance ministry) to the developing countries faced with economic crisis. Since all of these institutions were based in Washington, the policy prescription was called Washington Consensus by the US economist John Williamson .       The (Washington Consensus ) 10-point reform policy prescriptions are as given below: (i) Fiscal discipline (ii) A redirection of public expenditure priorities toward fields offering both high economic returns and the potential to improve income distribution, such as primary health care, primary education, and infrastructure. (iii) Tax reform (to lower marginal rates and broaden the tax base) (iv) Interest rate liberalisation (v) A competitive exchange rate (vi) Trade liberalisation (vii) Liberalisation of FDI inflows (viii) Privatisation (...