March 11, 2019

National income

National Income: National Income is estimate measure the volume of commodities and services turn out during a given period constuted without Depreciation.     
Financial Year ( 1 April- 31March): In India National Income was first time calculated by Mrs. Dada Bhi Narroji in 1868 at that time population was seventy crore and per capita income was 20 rupees. Mrs. Narroji gave the theory of Drain of Wealth. In India national income was calculated by CSO ( central stastical office or organization). 

Tools of National Income: GDP,NDP,GNP,NNP.                                                                                        
 GDP (gross domestic product ): it is the gross market value of all final goods and services produced within the domestic territory of country in a financial year or an year.      

GDP = C + I + G + ( x-m).  C= Consumption, I= Investment, G= Government expenditure, x= Export, m= Import . NDP ( Net domestic product) = GDP -Depreciation.                                                                                                         
GNP ( gross national product) : An estimate measure the total worth of a country by its national on its land or on foreign land is known as GNP. 

GNP= GDP + income ( coming from outside of India ) - income ( Income going outside of India)       OR     GNP= GDP+ NFIA( net factor income aboard) . 

NNP ( Net national product): it is the market value of all final goods and services after allowing for depreciation. It is also called national income at market price. 

NNP(at factor costs)= NNP( at market costs) - indirect taxes + subsidies.       

National income at factor costs: it is a national income, at factor costs the sum of all incomes earned by resources supply for their contribution of land, capital, labour, organization rent, wages,income,profit etc.                               
  Per capita income: it is the best indicator to check the growth and development of country. 
Per capita income =  (national income ÷ total population) . 

Other concepts

Personal income = national income + transfer payments + net interest - retained earning - social security . 

Desposable Personal income= consume + subsidies.  OR  DPI = Personal income - direct taxes + subsidies. 
National income doesn't include: black money, transfer payments, social services, remittances, second hand goods and services etc.   
Note:- Method of Calculation of National Income are mainly three types : (I) Production Method (II) Income method (III) Expenditure Method.

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