GDP at Market Prices + Net Factor income from Abroad. . . Net National Product (NNP) (at Market price) Net National Product refers to the value of the net output of the economy during the year.
NNP is obtained by deducting the value of depreciation, or replacement allowance of the capital assets from the GNP. It is expressed as, (depreciation is also called Capital Consumption Allowance + Indirect taxes) . . NNP at Factor cost NNP refers to the market value of output.
Whereas NNP at factor cost is the total of income payment made to factors of production. Thus from the money value of NNP at market price, we deduct the amount of indirect taxes and add subsidies to arrive at the net national income at factor cost. . .
Personal Income Personal income is the total income received by the individuals of a country from all sources before payment of direct taxes in a year. Personal income is never equal to the national income, because the former includes the transfer payments whereas they are not included in national income. Personal income is derived from national income by deducting undistributed corporate profit, and employees’ contributions to social security schemes and adding transfer payment. NNP = GNP – depreciation allowance.
NNP at factor cost = NNP at Market prices – Indirect taxes + Subsidies. Personal Income = National Income – (Social Security Contribution and undistributed corporate profits) + Transfer payments - - National Income