National Income
Economics · राष्ट्रीय आय
📋Quick Overview
National Income is the total monetary value of all goods and services produced by a country in a financial year. Key concepts include GDP, GNP, NDP, NNP, and Per Capita Income. The Central Statistics Office (CSO), now renamed as National Statistical Office (NSO), calculates India's national income. The current base year for GDP calculation is 2011-12. India is the 5th largest economy in the world by nominal GDP.
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GDP formula: GDP = C + I + G + (X - M) where C=Consumption, I=Investment, G=Government Spending, X=Exports, M=Imports
📖Key National Income Concepts
| Concept | Full Form | Formula / Definition |
|---|---|---|
| GDP | Gross Domestic Product | Total value of all goods & services produced WITHIN a country's borders in a year (by both residents & non-residents) |
| GNP | Gross National Product | GNP = GDP + Net Factor Income from Abroad (NFIA). Includes income earned by residents abroad, excludes income earned by foreigners domestically |
| NDP | Net Domestic Product | NDP = GDP - Depreciation. Depreciation = wear and tear of capital goods |
| NNP | Net National Product | NNP = GNP - Depreciation. Also: NNP = NDP + NFIA |
| National Income | NNP at Factor Cost | NNP at Factor Cost = NNP at Market Price - Indirect Taxes + Subsidies. THIS is the true National Income |
| Per Capita Income | Per Capita Income | National Income / Total Population. Indicates average income per person |
📝Factor Cost vs Market Price
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Current vs Constant Prices: Current prices = at present year prices (Nominal GDP). Constant prices = at base year prices (Real GDP). Real GDP removes inflation effect.
📝Important Facts
- •Current base year for GDP calculation: 2011-12
- •NSO (National Statistical Office) calculates GDP. Formed by merging CSO + NSSO in 2019
- •GDP measured by 3 methods: Production (output), Income, and Expenditure method
- •India's GDP rank: 5th largest by nominal GDP (after USA, China, Germany, Japan)
- •India is 3rd largest by PPP (Purchasing Power Parity) after USA and China
- •Dadabhai Naoroji was the first Indian to calculate national income (1867-68, 'Poverty and Un-British Rule in India')
- •V.K.R.V. Rao gave the first scientific estimate of national income (1931-32)
- •National Income Committee (1949): Chairman — P.C. Mahalanobis; Members — D.R. Gadgil, V.K.R.V. Rao