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NATIONAL INCOME
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National Income
Gross Domestic Product (GDP)
The money value of the sum of total of goods and services produced in the country is called Gross Domestic Product.

Net Domestic Product (NDP)
NDP is obtained by deducting depreciation from GDP.

National Income
NDP is added with the Net Inflow from abroad to arrive at national income (i.e., NDP+Net inflow from abroad). National Income is measured in three methods i.e., Product Method, Income Method and Expenditure Method.

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National Income
Methods Of Estimating National Income
There are 3 methods of estimating National Income of an economy:

• a) Product or Value Added Method: In this method the value added by different industries to the value of the final product is calculated. To arrive at the net value added by an industry we deduct the value of raw materials or intermediate goods used by this industry from the value of its output.
• b) Income Method: This method approaches National Income from distribution side. National Income is obtained by summing up of the incomes of all individuals in the country.
• c) Expenditure Method: In this method we sum up all the consumption and investment expenditures made by all individuals as well as Government of a country during a year.

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National Income
National Income (NI) Estimates in India

In India national income is estimated using different methods since this is not possible by a single method. So for agriculture allied (primary) sector and manufacturing sector we use product method and for the rest income method is used. In India the task of estimation of national income has been assigned to the Central Statistical Organisation (CSO) which is under the Ministry of Statistics and Programme Implementation.

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Concepts of National Income
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Concepts of National Income

National Income is defined as the sum of total factor income accruing to the residents of a country during a year.

The National Income committee was appointed in 1949 with P.C. Mahalonobis as its chairman and D.R.Gadgil and U.R.R.V. Rao as members.

The original estimates of national income for the period 1948-49 to 1964-65 are available in what is called as the conventional series of national income. These estimates are at current prices as well as 1948-49 prices.

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Concepts of National Income

In 1967, revised methodology was accepted and with it the conventional series was terminated.

The CSO publishes the annual National Accounts Stastistics (NAS) which contains useful information on various aspects of countrys national income.

In India, national income estimates are related with the financial year (1st April to 31st March).

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GNP (Gross National Product)
GNP refers to the money value of total output or production of final goods and services produced by the national income of a country during a given period of time.

GNP = GDP+X-M
X= Export, GDP= Gross Domestic Product, M= Import.
If emport= import or X=M,
Then GNP=GDP and it is a condition for closed economy.

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GDP (Gross Domestic Product)
It is the total money value of all final goods and services produced within the geographical boundaries of the country during a given year.

GDP = GNP-(X+M)

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NNP (Net National Product)
NNP is obtained by subtracting depreciation value from GNP.

NNP= GNP-Depreciation.

When NNP is obtained at factor cost, it is known as National Income (NI).
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National Income (NI)
National Income is calculated by subtracting the net indirect taxes from NNP at market prices.

NNP at Factor Cost or NI: NNP at market prices - Indirect Taxes + Subsidies.

NNP at Market Prices: NNP at factor cost + Indirect Taxes - Subsidies.

GNP at Market Prices: GDP at market prices + Net factor income earned from abroad.

NNP at Market Prices: GNP at market prices - Consumption of fixed capital.

Per Capita Income = (N.I. at constant prices)/Population

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Conclusion
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