National Income ( राष्ट्रीय आय )

National income

The first attempt to calculate the national income of India was done by Dadabhai naoroji. According to them in 1868 per capita income was 20 INR. He published a book called Poverty and Unbritish Rule in India where he mentioned his study about national income of India.

Who calculates the National Income ?

At present, the national income of India is calculated by CSO. CSO stands for Central statistical organisation ( केंद्रीय सांख्यिकीय संगठन ) .

National Income ( राष्ट्रीय आय )

If you want to understand the concept of national income then first we need to understand these terms.

GDP ➤ Gross Domestic Product ➤ सकल घरेलु उत्पाद
NDP ➤ Net Domestic Product ➤ शुद्ध घरेलू उत्पाद
GNP ➤ Gross National Product ➤ सकल राष्ट्रीय उत्पाद
NNP ➤ Net National Product ➤ शुद्ध राष्ट्रीय उत्पाद

GDP ➤ Gross Domestic Product

The final monetary value of all goods and services produced by an economy in a financial year is called GDP. (India's financial year is from 1 April to 31 March )

NDP ➤ Net Domestic Product

When we subtract the depreciation from GDP then we get NDP.

NDP = GDP - Depreciation

What is depreciation ?

A reduction in the value of an asset with the passage of time, due in particular to wear
and tear.

GNP ➤ Gross National Product

Total monetary value of goods and services by Indian nationals, whether they are in India or outside India is called GNP.

GNP = GDP + X - M

X = Income earned by Indians in abroad. 
M = Income earned by foreigners in India.

NNP ➤ Net National Product

NNP = GNP - Depreciation

Now let's jump on National Income

National Income ( राष्ट्रीय आय )

FC ➤ Factor Cost

When we produce a product including land, labour, capital, organiser, how much it costs us is called factor cost.

Factor Cost = Total Cost / Total Quantity

MP ➤ Market Price

when a buyer buy something in market, that price is called market price. Market price is a inclusion of indirect taxes in Factor Cost.

Market Price = Factor Cost + Indirect Taxes

NNPMP = NNPFC + Indirect Taxes

NNPFC = NNMP - Indirect Taxes + Subsidy

When indirect taxes are deducted from the net national product received at market price and subsidy is added, then it gives us the national income.

Per Capita Income = National Income / Total Population

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