Net National Product (NNP)

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NNP  Net National Product (NNP)  Net National Product (NNP) of an economy is the GNP after deducting the loss due to ‘depreciation’. The formula to derive it may be written like this: NNP = GNP – Depreciation or, NNP = GDP + Income from Abroad – Depreciation. The different uses of the concept of NNP are as given below: (i) This is the ‘National Income’ (NI) of an economy. Though, the GDP, NDP, and GNP, all are ‘national income’ they are not written with capitalized ‘N’ and ‘I’. (ii) This is the purest form of the income of a nation. (iii) When we divide NNP by the total population of a nation we get the ‘per capita income’ (PCI) of that nation, i.e., ‘income per head per year’. A very basic point should be noted here that this is the point where the rates of depreciation followed by different nations make a difference. Higher the rates of depreciation lower the PCI of the nation (whatever be the reason for it logical or artificial as in the case of depreciation being used as a...
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Understanding Economics

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Understanding Economics :- Understanding economics and its nuances have always been a challenge, especially, for those who come from no background in it. It doesn’t mean that those with a background (university-educated) in it are very comfortable—great many of such people face an altogether different sort of problem—they understand less economics than they know! Missing the applicatory dimension of economics is a general problem among such people. Today, emphasis being on the applications of economics (especially in the competitive exams) ‘knowing’ economics is not enough rather one is required to have the ability to apply economics in everyday life—and this is only possible if one ‘understand’ economics!


Making economics easier for both categories of the readers have been one of the prime aims of this website. Rather this has not been an easy task for two reasons—firstly, keeping the soul of concepts intact while simplifying them and secondly, educating the reader about the contemporary economic issues. Developing a blog on Indian Economy would have been an easier task had simplifying economics not been among the aims. This is why along with the analyses of economic issues there flows an undercurrent of economic theory throughout the blog. For this, it will be wiser on the part of the reader to keep in touch with the footnotes and glossary to feel and comprehend the subject matter in a desired way.

economics, social science that seeks to analyze and describe the production, distribution, and consumption of wealth. In the 19th century economics was the hobby of gentlemen of leisure and the vocation of a few academics; economists wrote about economic policy but were rarely consulted by legislators before decisions were made. Today there is hardly a government, international agency, or large commercial bank that does not have its own staff of economists. Many of the world’s economists devote their time to teaching economics in colleges and universities around the world, but most work in various research or advisory capacities, either for themselves (in economics consulting firms), in industry, or in government. Still others are employed in accounting, commerce, marketing, and business administration; although they are trained as economists, their occupational expertise falls within other fields. Indeed, this can be considered “the age of economists,” and the demand for their services seems insatiable.

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Net Domestic Product (NDP)

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 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...
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