DOMESTIC TERRITORY
In layman’s language, domestic territory means the political frontiers of a country. However, for national income accounting, it is used in a wider sense.
Definition: Domestic Territory is geographical territory administered by a government within which persons, goods and capital circular freely.
Let us first see what IS not included in a domestic territory:
The domestic territory DOES NOT include-
- Embassies, consulates and military establishment of a foreign country, for example- the American embassy in India is the domestic territory of America and not India
- An international organization like UNO, WHO located within the geographical boundaries of a country
What all is included?
Ship and aircraft owned and operated by normal residents between two countries.
- For example- Planes operated by Air India between London and Paris are part of the domestic territory of India. Similarly, planes operated by Singapore Airways between Indian and Japan are a part of domestic territory of Singapore.
Fishing Vessels, oil and natural gas rigs and floating platforms operated by the residents of a country in the international waters where they have exclusive rights of operation.
- For example, fishing boats operated by Indian anglers in international waters of Indian Ocean will be considered a part of domestic territory of India.
Embassies, consulates and military establishments of country located abroad.
- For example- Indian Embassy in Japan is a part of the domestic territory of India.
NORMAL RESIDENTS
Definition: Normal Residents of a country refers to an individual or institution who ordinarily resides in the country and whose centre of economic interest also lies in that country.
‘Centre of Economic Interest’ implies:
- The resident lives or is located within the domestic Territory.
- The resident carries out basic economic activities of earning, spending, and accumulation from that location.
Following are not included in Normal residents:-
- Foreign Tourists & Visitors
- Foreign staff of Embassies, officials, diplomats and members of the armed forces.
- International Organization like WHO, UNO etc.
- Employers of International Organizations.
- Crewmembers of foreign vessels, commercial travellers and seasonal workers, provided their stay is less than one year.
- Border workers, who cross borders on a regular basis to work in other countries.
CITIZENSHIP AND RESIDENTSHIP