Who are normal residents of a country?

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Proper understanding of the term 'normal residents of a country' is very essential in the context of the estimation of domestic product and national product.

For understanding the meaning of this term, it would be better to know first the meaning of term 'resident’.

A resident means a person who ordinarily resides in that country in which his interests lie. Such a person is called the normal resident of a country because he normally resides in the country where his interests lie, Therefore, normal residents of a country may be defined as such persons who ordinarily reside in that country where their centre of economic interest lies,

The term 'normal residents' is a comprehensive term and includes both individuals and institutions, It includes both nationals (such as Indians living in India) and foreigners (non-nationals) residing in a host country (such as Nepalese holding Nepalese passports and citizenship, settled and living in India and having their economic interests in India).

Besides, Indians living abroad will also be regarded as normal residents of India if their economic interest He in India and their stay in foreign countries is of, less than one year. Thus, normal residents can be of three types. They are:

(i) Nationals of a country residing in the country of which they arc the nationals, such as Indians living in India.

(ii) Nationals of a country living abroad temporarily (for less than one year) but their interest lie in the country of which they are the nationals such as Indians living temporarily in the foreign countries.

(iii) Foreigners living in a country for more than one year.


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