Measures of the Nation's economy: GDP, GNP, NDP

Gross Domestic Product (GDP ) or Gross Domestic Income (GDI) refers to the value of all completed goods and services produced within the country in a year (or a stipulated time period).

GDP = consumption + gross investment + government spending + (exports − imports)

It is regarded as the sum of profits added at every level of production. India was ranked 12th in the world in 2007, as far as GDP is concerned. Gross domestic product per capita is the mean value of the output produced per person, which is also the mean income.

While calculating GDP, the depreciation of capital stock is not considered (this is known as "gross"). If the depreciation is taken into account and subtracted from the GDP, then the indicator is called the Net Domestic Product. The gap between these two should ideally be narrowing - indicating an improving condition of capital stock.

Gross National Product defines the value of all goods and services produced in a country in one year, plus income earned by its citizens abroad, minus income earned by foreigners in the country.

GDP is more popular than GNP as a large number of nationals work in countries abroad these days.

Gross National Income (GNI) refers to the country's GDP, together with the income it receives from other countries through interests and dividends, minus similar payments it makes to other countries.

GNI is similar to GNP, but while calculating GNI you deduct indirect business taxes as well.

In the news: Satyam nosedives as Raju admits fraud

Happy New Year to all the readers. I'd taken a week's break and now it's back to the posting board.

Today's airwaves are full of Satyam founder R. Raju's resignation after admitting a massive financial fraud. In a letter to the Board of Directors, Raju explains how there is a huge mistmatch in the actual operating profits and that reflected in the books - apparently inflated profits have been shown for the past several years. In fact, the deal with Maytas (which broke down as we all know) was a last-ditch attempt to bridge the gap with real assets instead of the fictitious ones. What's more none of the board members had an inkling of what was going on.

The consequences: Satyam shares plunged by 80% (!!) after market sentiments understandably turned bearish - the BSE is back at around the 9,500 mark after a good start to the year had seen the sensex rise upwards of 10k again. The Nifty is also down today - by over 7 percent. The Ministry of Corporate Governance will look into the matter along with SEBI, and things don't look bright for either Satyam or its founder. Ram Mynampati, who took over as Interim CEO of the company, has released a statement saying that they will explore all avenues to secure the future of the copmany and he also reaffirmed the company's commitment towards associates, customers and shareholders. We'll have to keep a tab on how this story unfurls.