National Income: GDP, GNP, NNP and How They Are Measured
National Income: GDP, GNP, NNP and How They Are Measured
National income measures the total value of goods and services an economy produces. NTPC asks the definitions and relationships between GDP, GNP and NNP, the meaning of factor cost and market price, the measuring methods, and the base year of India's GDP series.
1. Key Aggregates
| Aggregate | Meaning |
|---|---|
| GDP (Gross Domestic Product) | Market value of all final goods and services produced within the country in a year |
| GNP (Gross National Product) | GDP + net factor income from abroad |
| NNP (Net National Product) | GNP − depreciation |
| NDP | GDP − depreciation |
| National income | NNP at factor cost |
| Per capita income | National income ÷ population |
Market price = factor cost + indirect taxes − subsidies
Nominal GDP uses current prices; real GDP uses constant (base-year) prices
GDP deflator = nominal GDP ÷ real GDP × 100
2. Methods of Measuring
| Method | Adds up |
|---|---|
| Production (value added) | Value added by all sectors |
| Income | Wages, rent, interest and profit |
| Expenditure | Consumption + investment + government spending + net exports |
3. India's National Accounts
| Item | Facts |
|---|---|
| Agency | National Statistics Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) |
| Base year | Revised from 2011-12 to 2022-23; the new GDP series was released on 27 February 2026 |
| CPI base year | Revised from 2012 to 2024 (new series released 12 February 2026) |
| WPI base year | Revised from 2011-12 to 2022-23 (new series from June 2026, Office of the Economic Adviser, DPIIT) |
| First estimate of national income | Dadabhai Naoroji (Poverty and Un-British Rule in India) |
| First scientific estimate | V.K.R.V. Rao |
✗ NNP = GDP − depreciation | ✓ That is NDP; NNP = GNP − depreciation
✗ India's GDP base year is still 2011-12 | ✓ The new series released in February 2026 uses 2022-23
हिंदी नोट: जीडीपी देश की सीमा के भीतर एक वर्ष में उत्पादित अंतिम वस्तुओं और सेवाओं का बाज़ार मूल्य है। जीएनपी = जीडीपी + विदेशों से शुद्ध साधन आय; एनएनपी = जीएनपी − मूल्यह्रास। फरवरी 2026 में जीडीपी का आधार वर्ष 2011-12 से बदलकर 2022-23 किया गया।
Exam Pointer: Verified NTPC pattern: NNP as GNP minus depreciation (December 2020 CBT-1, May 2022 CBT-2). Measuring-method and base-year questions are tagged syllabus-based; the base-year facts were checked on 7 October 2026.
Pariksha Pattern: Every Way NTPC Asks This Topic
Pattern 1: Relations between aggregates
[PYQ: NTPC CBT-1 28-Dec-2020 Shift-2 | NTPC CBT-2 10-May-2022 Shift-1]
EXAM LEVEL
Q. Net National Product is obtained by subtracting depreciation from which aggregate?
Gross National Product.
Answer: GNP
EXAMATLAS LEVEL
Q. How is GNP obtained from GDP, and what is national income in the technical sense?
GNP = GDP + net factor income from abroad. National income is NNP at factor cost.
Answer: Add net factor income from abroad; NNP at factor cost
Pattern 2: Factor cost, market price and real GDP
[Pattern: syllabus-based, PYQ-style]
EXAM LEVEL
Q. How is market price obtained from factor cost?
Market price = factor cost + indirect taxes − subsidies.
Answer: Add indirect taxes, subtract subsidies
EXAMATLAS LEVEL
Q. What is the difference between nominal and real GDP, and how is the GDP deflator calculated?
Nominal GDP is at current prices; real GDP is at constant base-year prices. Deflator = nominal GDP ÷ real GDP × 100.
Answer: Current vs constant prices; nominal ÷ real × 100
Pattern 3: Methods of measurement
[Pattern: syllabus-based, PYQ-style]
EXAM LEVEL
Q. Which method of measuring national income adds wages, rent, interest and profit?
The income method.
Answer: Income method
EXAMATLAS LEVEL
Q. What four components does the expenditure method add, and which agency estimates India's GDP?
Consumption, investment, government spending and net exports. The National Statistics Office under MoSPI.
Answer: C + I + G + (X − M); NSO, MoSPI
Pattern 4: Base years and history
[Pattern: syllabus-based, PYQ-style]
EXAM LEVEL
Q. What is the base year of India's new GDP series?
2022-23 (released on 27 February 2026, replacing 2011-12).
Answer: 2022-23
EXAMATLAS LEVEL
Q. Who made the first estimate of India's national income, and to which year was the CPI base revised in 2026?
Dadabhai Naoroji. The CPI base was revised from 2012 to 2024.
Answer: Dadabhai Naoroji; 2024
60-Second Revision
- GNP = GDP + net factor income from abroad; NNP = GNP − depreciation.
- National income = NNP at factor cost.
- Three methods: production, income, expenditure.
- New bases (2026): GDP 2022-23, CPI 2024, WPI 2022-23; agency NSO-MoSPI.