Concept of Normal Resident

Normal resident of a country refers to an individual or an institution who ordinally resides in the country and whose centre of economic interest also lies in that country.

Centre of Economic Interest implies:

1. The resident lives in Domestic territory of the country.
   and
2. The resident carries out basic economic activities from that location

It does not include:

1.  Foreign tourists and visitors who visit a country for vacation, medical treatment, study etc.
2.  Foreign staff of Embassies, officials, diplomats and members of the armed forces of a foreign country located in a given country.
3.  International Organizations like UN, WHO etc.
4.  Employees of International Organizations
5.  Crew members of foreign vessels, commercial travelers and seasonal workers, if they stay for less than a year.
6.  Border workers who live near international borders and cross it on a daily basis. They are treated as normal residents of the country where they live, not where they work.

Why is Concept of National Income Important?

It is important to calculate National income

It is gross money value of Goods and Services Produced by normal residents of a country after Depreciation

Hence, it does not include income of foreigners working in India

But it includes income of Indians visiting abroad