- It gives economic performance as a whole but does not indicate which sectors contribute more
- Its growth shows an increase in welfare yet some people face a falling / constant/increasing welfare.
- GNP has only a few major contributors and these are the only beneficiaries.
- The percentage capital calculated from GNP shows that the welfare of all citizens is the same which is a fallacy.
- It faces double counting in the value added approach and therefore the data is wrong misleading.
- Lack of sufficient competent accumulators leads to exclusion of necessary data hence misleading information
- Unwillingness of the self-employed people to give their correct returns in attempt to evade tax leads to the wrong information.
- Corrupt auditors are bribed to give wrong balances hence tax evasion. The level of GNP is also affected in the process.
- Some activities are left out due to inaccessibility hostility, animals etc.
- Estimation of the subsistence sector which does not go through the moment system is a problem.
- Some goods and services do not go through the official market system
- Self provision of services e.g. house wives are excluded.
- GNP excludes leisure one decides to take by working less.
- Illegal activities, though very lucrative, are excluded.
- It does not include rents (opportunity cost) for owner occupied houses as well as value of owner raw materials.
- It leaves out salaries & wages paid in kind.
Advertisement
The following two tabs change content below.
We, at BMS.co.in, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites!
If you want to join us, please mail to [email protected]
Latest posts by BMS Team (see all)
- Meterdown Annual Festival is back with its 7th edition – Starts today! - January 16, 2020
- Tybms sem 6 results 2019 declared on 19th June 2019 - June 19, 2019
- TYBMS Sem 6 Results 2019 Update from BMS khabri! - June 15, 2019
… [Trackback]
[…] Read More Info here on that Topic: bms.co.in/what-are-the-failures-of-gnp-as-a-measure-of-output-and-welfare/ […]