|
 

What is National Income?

@ |
 


 
 
 



 
  

@ 


  






 
 
  



 Jasic Concepts
@ Gross Domestic Product (GDP)
@ Gross National Product (GNP)
@ Net National Product (NNP)
@ Net Domestic Product (NDP)
 Gross Domestic Product
(GDP)
@ Gross Domestic Product (GDP) is the total
value of output (goods and services)
produced by the factors of production
located within the country¶s boundary in a
year. The factors of production may be
owned by any one ± citizens or foreigners.
 Gross National Product
(GNP)
@ Gross National Product (GNP) is the total value
of output (goods and services) produced and
income received in a year by domestic residents
of a country. It includes profits earned from
capital invested abroad.

@ GNP ± Net income earned from abroad = GDP

 Net National Product
(NNP)
@ Net National Product (NNP) is arrived at
by making some adjustment, with regard
to depreciation, in GNP
@ GNP ± Depreciation = NNP
Net domestic product (NDP)
@ Net domestic product (NDP) is also arrived
from GDP by making adjustment with
regard to depreciation
@ GDP ± Depreciation = NDP
ë

 
|
 


@ 



@ 



@ 









@ The sum total of products produced in
these three sectors is the total output of
the nation. The next step is to find out the
value of these products in terms of money.
@ The money sent by Indian citizens working
abroad is also added to this. Now we get
the gross national income.
@ x|ë
 


 



   
 
ë


@ The income received by the factors of production
during a year can be obtained by adding rent to
land, wages to labour, interest to capital and
profit to organizations. This will be equal to the
income of the nation
@ Money sent by Indian citizens working abroad is
also added to this.
@ x|

! 







   



ë


@ Government as well as private individuals spend
money for consumption and production
purposes. The sum total of expenditure incurred
in a country
during a year will be equal to national income.

@ x| 


x







 

"# 


 
|
 

@ Non availability of reliable statistics.

@ The service of housewives is not included in the
national income because this service is not sold
in the market.
@ Individuals do not keep correct account of their
consumption.
@ Illiteracy and ignorance.
@ Lack of proper criteria for measuring the value of
services.

 
|
 


@ $ %ë

@ |&&ë

'

|
@ x(




@ )



@  


@ 

*

 3 MMARY
@ National Income is the money value of the total goods and services
@ produced in a country during a year.
@ National Income helps us to know the economic progress achieved
and to
@ make comparative study.
@ Product method, Income method and Expenditure method are the
three
@ methods used for national income calculation.
@ In India national income is calculated and published by the Central
3tatistical
@ Organization (C3O).
@ Net National Product, Per Capita Income etc., are some of the
important
@ concepts related to National Income.