The GNP can also be measured with the help of those payments or costs which are faced by the firms regarding production of goods. Accordingly, GNP is the sum of all those payments which the factors of production earn during a year. In this context we sum the following payments or remunerations.

  1. Wages

In connection with the wages, the salaries, wages against physical and mental services, bonuses, the payments in the form of goods and the cash prizes are included. Moreover, whatsoever is deducted by the employers and labor unions against social welfare, etc. is also included.

  1. Interest

Here we include all that interest which has been earned by the people and firms etc. during a year. In addition to domestic interest, the interest earned against foreign securities will also be included. Rather net interest, the gross interest in entered.

  1. Rents

What soever is earned by the people against the use of their real assets like farms, houses and shops, etc. During a year will be summed. The rents of self owned houses and shops will also be entered. The royalties earned against copy rights or against the use of natural resources will also be included.

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    Profits

The profits earned by the sole proprietor, joint stock companies, business corporates and partnerships will be included. In addition to profits the undistributed profits and the taxes on profits are also included.

           Thus, by summing the above mentioned components we get NI at factor costs. But to get gross national            income which is equal to GNP we will have to include (a) indirect business taxes and (b) depreciation                 allowances. They are as:

(a) Indirect Business taxes

Excise duty, sales tax and import duties which are paid by the businessmen are known as indirect           business taxes. These do not represent the factor costs rather they are expenditures of the firms. As they are like costs of production and hence, included in the GNP.

(b) Depreciation Allowances

During the process of production there is wear and tear of machines. Accordingly, the firms have to make expenditure against such depreciation. As they have been paid/borne by the producers, hence they also represent costs of production. Consequently to know GNP, we will include all the depreciation allowances in NI.