{"id":21027,"date":"2024-01-03T09:46:01","date_gmt":"2024-01-03T09:46:01","guid":{"rendered":"https:\/\/edukemy.com\/blog\/?p=21027"},"modified":"2024-03-18T10:30:23","modified_gmt":"2024-03-18T10:30:23","slug":"upsc-ncert-notes-indian-economy-national-income","status":"publish","type":"post","link":"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/","title":{"rendered":"UPSC NCERT Notes &#8211; Indian Economy &#8211; National Income"},"content":{"rendered":"\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/edukemy.com\/upsc\/upsc-economy?utm_source=Blog&amp;utm_medium=Banner&amp;utm_campaign=Blog+Economy\" target=\"_blank\" rel=\"noreferrer noopener\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1280\" height=\"300\" src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/17.png\" alt=\"\" class=\"wp-image-42386\" srcset=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/17.png 1280w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/17-1170x274.png 1170w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/17-585x137.png 585w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" \/><\/a><\/figure>\n\n\n\n<p>For UPSC aspirants, delving into the intricacies of the Indian economy, particularly the concept of National Income, is crucial for comprehensive preparation. <strong><em>National Income serves as a foundational pillar in understanding the economic landscape of a nation, encompassing the total value of goods and services produced within its borders over a specified period<\/em><\/strong>. To navigate through this complex terrain, UPSC NCERT Notes on Indian Economy provide a structured and insightful approach. These notes meticulously curated from the National Council of Educational Research and Training (NCERT) textbooks offer aspirants a clear understanding of key concepts, methodologies, and challenges pertaining to National Income measurement in India. By incorporating these notes into their study regimen, UPSC candidates can gain a solid grasp of the fundamentals, empowering them to tackle related questions with confidence in the competitive examination.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_73 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-69d3e9f0cdd96\" class=\"ez-toc-cssicon-toggle-label\"><p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-cssicon\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d3e9f0cdd96\"  \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Definition\" title=\"Definition:\">Definition:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Calculation\" title=\"Calculation:\">Calculation:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Considerations\" title=\"Considerations:\">Considerations:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Evolution_of_the_National_Income_Accounting_System\" title=\"Evolution of the National Income Accounting System\">Evolution of the National Income Accounting System<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#National_Income_Accounting\" title=\"National Income Accounting\">National Income Accounting<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#National_Income_and_Related_Aggregates\" title=\"National Income and Related Aggregates\">National Income and Related Aggregates<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#1_Factor_Cost\" title=\"1. Factor Cost:\">1. Factor Cost:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#2_Basic_Price\" title=\"2. Basic Price:\">2. Basic Price:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#3_Market_Price\" title=\"3. Market Price:\">3. Market Price:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Intermediate_Consumption_of_Goods\" title=\"Intermediate Consumption of Goods:\">Intermediate Consumption of Goods:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Concepts_of_National_Income\" title=\"Concepts of National Income\">Concepts of National Income<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#The_Temporal_Aspect_of_National_Income\" title=\"The Temporal Aspect of National Income\">The Temporal Aspect of National Income<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Gross_Domestic_Product_GDP\" title=\"Gross Domestic Product (GDP)\">Gross Domestic Product (GDP)<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#GDP_Equation\" title=\"GDP Equation:\">GDP Equation:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#GDP_at_Market_Price_GDP_MP\" title=\"GDP at Market Price (GDP MP)\">GDP at Market Price (GDP MP)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#GDP_MP_Equation\" title=\"GDP MP Equation:\">GDP MP Equation:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#GDP_at_Factor_Cost_GDP_FC\" title=\"GDP at Factor Cost (GDP FC)\">GDP at Factor Cost (GDP FC)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Government_Grants_and_Subsidies_in_GDP_Calculation\" title=\"Government Grants and Subsidies in GDP Calculation\">Government Grants and Subsidies in GDP Calculation<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#GDP_at_Factor_Cost_FC_and_Market_Price_MP\" title=\"GDP at Factor Cost (FC) and Market Price (MP)\">GDP at Factor Cost (FC) and Market Price (MP)<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Economic_Growth_Rate\" title=\"Economic Growth Rate\">Economic Growth Rate<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Gross_Domestic_Savings\" title=\"Gross Domestic Savings\">Gross Domestic Savings<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Methods_of_GDP_Calculation\" title=\"Methods of GDP Calculation\">Methods of GDP Calculation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Significance_of_Value_Added_Method_in_GDP_Calculation\" title=\"Significance of Value Added Method in GDP Calculation\">Significance of Value Added Method in GDP Calculation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Income_Approach_to_GDP_Calculation\" title=\"Income Approach to GDP Calculation\">Income Approach to GDP Calculation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Expenditure_Approach_to_GDP_Calculation\" title=\"Expenditure Approach to GDP Calculation\">Expenditure Approach to GDP Calculation<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Real_Gross_Domestic_Product_Real_GDP\" title=\"Real Gross Domestic Product (Real GDP)\">Real Gross Domestic Product (Real GDP)<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Real_GDP\" title=\"Real GDP:\">Real GDP:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Nominal_GDP\" title=\"Nominal GDP:\">Nominal GDP:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Relevance_of_GDP\" title=\"Relevance of GDP\">Relevance of GDP<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-30\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Indias_Base_Year_Change_for_GDP_Computation\" title=\"India&#8217;s Base Year Change for GDP Computation\">India&#8217;s Base Year Change for GDP Computation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-31\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Gross_National_Product_GNP\" title=\"Gross National Product (GNP)\">Gross National Product (GNP)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-32\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Gross_National_Product_at_Market_Price\" title=\"Gross National Product at Market Price\">Gross National Product at Market Price<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-33\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Income_from_Abroad_in_GNP_Calculation\" title=\"Income from Abroad in GNP Calculation\">Income from Abroad in GNP Calculation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-34\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Gross_National_Product_at_Factor_Cost\" title=\"Gross National Product at Factor Cost\">Gross National Product at Factor Cost<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-35\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Net_National_Product_NNP\" title=\"Net National Product (NNP)\">Net National Product (NNP)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-36\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#National_Income_NI\" title=\"National Income (NI)\">National Income (NI)<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-37\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Net_Domestic_Product_at_Factor_Cost\" title=\"Net Domestic Product at Factor Cost\">Net Domestic Product at Factor Cost<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-38\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Real_National_Income_RNI\" title=\"Real National Income (RNI)\">Real National Income (RNI)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-39\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Per-Capita_Income_PCI\" title=\"Per-Capita Income (PCI)\">Per-Capita Income (PCI)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-40\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Personal_Income_PI\" title=\"Personal Income (PI)\">Personal Income (PI)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-41\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Other_Concepts_Related_to_National_Income\" title=\"Other Concepts Related to National Income\">Other Concepts Related to National Income<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-42\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Personal_Disposable_Income\" title=\"Personal Disposable Income\">Personal Disposable Income<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-43\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Factor_Income_Received_by_the_Private_Sector\" title=\"Factor Income Received by the Private Sector\">Factor Income Received by the Private Sector<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-44\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Green_Economy\" title=\"Green Economy\">Green Economy<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-45\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Green_GDP\" title=\"Green GDP\">Green GDP<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-46\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Green_GNP\" title=\"Green GNP\">Green GNP<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-47\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Potential_GDP\" title=\"Potential GDP\">Potential GDP<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-48\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Gross_Value_Added_GVA\" title=\"Gross Value Added (GVA)\">Gross Value Added (GVA)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-49\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#GVA_Calculation_Methods\" title=\"GVA Calculation Methods\">GVA Calculation Methods<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-50\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#GVA_vs_GDP\" title=\"GVA vs. GDP\">GVA vs. GDP<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-51\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Calculating_National_Income\" title=\"Calculating National Income\">Calculating National Income<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-52\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Problems_in_Calculating_National_Income\" title=\"Problems in Calculating National Income\">Problems in Calculating National Income<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-53\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Limitations_in_Measuring_National_Incomes\" title=\"Limitations in Measuring National Incomes\">Limitations in Measuring National Incomes<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-54\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Net_National_Income_NNI\" title=\"Net National Income (NNI)\">Net National Income (NNI)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-55\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Indian_Organizations_Related_to_National_Income_Accounts\" title=\"Indian Organizations Related to National Income Accounts\">Indian Organizations Related to National Income Accounts<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-56\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Ministry_of_Statistics_and_Programme_Implementation\" title=\"Ministry of Statistics and Programme Implementation:\">Ministry of Statistics and Programme Implementation:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-57\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#National_Statistical_Office_NSO\" title=\"National Statistical Office (NSO):\">National Statistical Office (NSO):<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-58\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Central_Statistical_Office_CSO\" title=\"Central Statistical Office (CSO):\">Central Statistical Office (CSO):<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-59\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#National_Sample_Survey_Office_NSSO\" title=\"National Sample Survey Office (NSSO):\">National Sample Survey Office (NSSO):<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-60\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#National_Statistical_Commission_NSC\" title=\"National Statistical Commission (NSC):\">National Statistical Commission (NSC):<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-61\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Growth_and_Structure_Trends_in_National_Income\" title=\"Growth and Structure Trends in National Income\">Growth and Structure Trends in National Income<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-62\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Prelims_Facts\" title=\"Prelims Facts\">Prelims Facts<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-63\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#UPSC_NCERT_Practice_Questions\" title=\"UPSC NCERT Practice Questions\">UPSC NCERT Practice Questions<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-64\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#1_The_national_income_of_a_country_for_a_given_period_is_equal_to_the_IAS_Pre_2013\" title=\"1. The national income of a country for a given period is equal to the IAS (Pre) 2013\">1. The national income of a country for a given period is equal to the IAS (Pre) 2013<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-65\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#2_The_term_%E2%80%98national_income_represents\" title=\"2. The term &#8216;national income represents\">2. The term &#8216;national income represents<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-66\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#3_Consider_the_following_statements_concerning_the_Indian_economy_IAS_Pre_2010\" title=\"3. Consider the following statements concerning the Indian economy IAS (Pre) 2010\">3. Consider the following statements concerning the Indian economy IAS (Pre) 2010<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-67\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#4_Consider_the_following_statements_with_reference_to_the_Indian_economy_IAS_Pre_2015\" title=\"4. Consider the following statements with reference to the Indian economy IAS (Pre) 2015\">4. Consider the following statements with reference to the Indian economy IAS (Pre) 2015<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-68\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#5_The_national_income_of_a_country_for_a_given_period_is_equal_to_the_IAS_Pre_2013\" title=\"5. The national income of a country for a given period is equal to the IAS (Pre) 2013\">5. The national income of a country for a given period is equal to the IAS (Pre) 2013<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-69\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#6_The_Net_National_Product_at_Market_Price_NNPMP_is_RASRTS_Pre_2021\" title=\"6. The Net National Product at Market Price (NNPMP) is RAS\/RTS (Pre) 2021\">6. The Net National Product at Market Price (NNPMP) is RAS\/RTS (Pre) 2021<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-70\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#7_One_of_the_problems_in_calculating_national_income_in_India_is_BPSC_Pre_2017\" title=\"7. One of the problems in calculating national income in India is BPSC (Pre) 2017\">7. One of the problems in calculating national income in India is BPSC (Pre) 2017<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-71\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#8_Base_year_in_national_income_accounting_means_UPPSC_Pre_2005_RASRTS_Pre_2021\" title=\"8. Base year&#8217; in national income accounting means UPPSC (Pre) 2005, RAS\/RTS (Pre) 2021\">8. Base year&#8217; in national income accounting means UPPSC (Pre) 2005, RAS\/RTS (Pre) 2021<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-72\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#9_Indicate_the_vital_change_in_the_measurement_of_national_income_of_India_recently_UPPSC_Pre_2005_RASRTS_Pre_2021\" title=\"9. Indicate the vital change in the measurement of national income of India recently UPPSC (Pre) 2005, RAS\/RTS (Pre) 2021\">9. Indicate the vital change in the measurement of national income of India recently UPPSC (Pre) 2005, RAS\/RTS (Pre) 2021<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-73\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#10_Net_National_Product_NNP_and_Gross_National_Product_GNP_are\" title=\"10. Net National Product (NNP) and Gross National Product (GNP) are\">10. Net National Product (NNP) and Gross National Product (GNP) are<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-74\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#11_Consider_the_following_statements\" title=\"11. Consider the following statements:\">11. Consider the following statements:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-75\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#12_Economic_development_is_usually_coupled_with_IAS_Pre_2011_2019\" title=\"12. Economic development is usually coupled with IAS (Pre) 2011, 2019\">12. Economic development is usually coupled with IAS (Pre) 2011, 2019<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-76\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#13_Hindu_growth_rate_is_related_to_UPPSC_Pre_1996_2006_and_BPSC_Pre_2019\" title=\"13. Hindu growth rate is related to UPPSC (Pre) 1996, 2006, and BPSC (Pre) 2019\">13. Hindu growth rate is related to UPPSC (Pre) 1996, 2006, and BPSC (Pre) 2019<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-77\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#14_Which_of_the_following_is_not_a_method_to_calculate_the_Gross_Domestic_Product_GDP\" title=\"14. Which of the following is not a method to calculate the Gross Domestic Product (GDP)?\">14. Which of the following is not a method to calculate the Gross Domestic Product (GDP)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-78\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#15_Which_of_the_following_statements_isare_correct\" title=\"15. Which of the following statement(s) is\/are correct?\">15. Which of the following statement(s) is\/are correct?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-79\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#16_The_proportion_of_labor_in_Gross_National_Product_GNP_becomes_low_due_to_the_following_reasons\" title=\"16. The proportion of labor in Gross National Product (GNP) becomes low due to the following reasons\">16. The proportion of labor in Gross National Product (GNP) becomes low due to the following reasons<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-80\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#17_Growth_in_absolute_and_per-capita_real_GNP_does_not_indicate_a_high_rate_of_economic_growth_if_IAS_Pre_2018\" title=\"17. Growth in absolute and per-capita real GNP does not indicate a high rate of economic growth if IAS (Pre) 2018\">17. Growth in absolute and per-capita real GNP does not indicate a high rate of economic growth if IAS (Pre) 2018<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-81\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#18_Despite_being_a_high-saving_economy_capital_formation_may_not_result_in_a_significant_increase_in_output_due_to_IAS_Pre_2018\" title=\"18. Despite being a high-saving economy, capital formation may not result in a significant increase in output due to IAS (Pre) 2018\">18. Despite being a high-saving economy, capital formation may not result in a significant increase in output due to IAS (Pre) 2018<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-82\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Know_Right_Answer\" title=\"Know Right Answer\">Know Right Answer<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-83\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Frequently_Asked_Questions_FAQs\" title=\"Frequently Asked Questions (FAQs)\">Frequently Asked Questions (FAQs)<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-84\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Q1_What_is_National_Income_and_why_is_it_important_in_the_context_of_the_Indian_economy\" title=\"Q1: What is National Income and why is it important in the context of the Indian economy?\">Q1: What is National Income and why is it important in the context of the Indian economy?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-85\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Q2_How_is_Gross_Domestic_Product_GDP_calculated_and_what_are_its_components_in_the_context_of_Indian_National_Income\" title=\"Q2: How is Gross Domestic Product (GDP) calculated, and what are its components in the context of Indian National Income?\">Q2: How is Gross Domestic Product (GDP) calculated, and what are its components in the context of Indian National Income?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-86\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Q3_What_role_does_the_Central_Statistical_Office_CSO_play_in_compiling_National_Income_data_for_the_Indian_economy\" title=\"Q3: What role does the Central Statistical Office (CSO) play in compiling National Income data for the Indian economy?\">Q3: What role does the Central Statistical Office (CSO) play in compiling National Income data for the Indian economy?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-87\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#In_case_you_still_have_your_doubts_contact_us_on_9811333901\" title=\"In case you still have your doubts, contact us on 9811333901.&nbsp;\">In case you still have your doubts, contact us on 9811333901.&nbsp;<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-88\" href=\"https:\/\/edukemy.com\/blog\/upsc-ncert-notes-indian-economy-national-income\/#Visit_our_YouTube_Channel_%E2%80%93_here\" title=\"Visit our YouTube Channel &#8211;&nbsp;here\">Visit our YouTube Channel &#8211;&nbsp;here<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Definition\"><\/span>Definition:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>National Income is the total net earnings from the production of goods and services in a country over a specified period, typically one year. It comprises wages, salaries, rent, profits, and interest. The market value of final goods and services produced in an economy during an accounting year is referred to as national income.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Calculation\"><\/span>Calculation:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>National Income = C + I + G + (X &#8211; M)<\/li><li>Where,<\/li><li>C = Total Consumption Expenditure<\/li><li>I = Total Investment Expenditure<\/li><li>G = Total Government Expenditure<\/li><li>X = Exports<\/li><li>M = Imports<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Considerations\"><\/span>Considerations:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>National income is regarded as Net National Product (NN) at factor cost.<\/li><li>Measurement methods include Gross National Product (GNP), Gross Domestic Product (GDP), Gross National Income (GNI), Net National Product (NNP), Net National Income (NNI), and Per-Capita Income (PCI).<\/li><li>National Income measures the flow of <strong>goods and services <\/strong>in the economy rather than collecting them as stock.<\/li><li><strong>National income statistics in India<\/strong> follow the fiscal year from April 1st to March 31st, managed by the National Statistics Office India.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Evolution_of_the_National_Income_Accounting_System\"><\/span>Evolution of the National Income Accounting System<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>The genesis of national income estimation traces back to 17th-century England, where Sir William Petty and Viol Gilbert laid the foundation.<\/li><li>In his book &#8220;<strong>Political Arithmetic<\/strong>,&#8221; <strong>Sir William Petty<\/strong> defined national income as the total value produced by workers in a year. Post-World War II, <strong>Simon Kuznets <\/strong>pioneered the development of the National Income Accounting System, earning the Nobel Prize in 1971.&nbsp;<\/li><li>Subsequently, global institutions like the<strong> World Bank<\/strong>, the International Monetary Fund, and the United Nations provided structure to this system.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"National_Income_Accounting\"><\/span>National Income Accounting<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>National income accounting serves as a double-entry system utilized by governments to measure a country&#8217;s economic performance effectively.&nbsp;<\/li><li>It assesses economic performance and the monetary flow within an economy.&nbsp;<\/li><li>The significance lies in facilitating techniques and procedures for the aggregate-level measurement of output and income.&nbsp;<\/li><li>The process, based on double-entry business accounting principles, summarizes a country&#8217;s economic performance by measuring key national income aggregates.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"National_Income_and_Related_Aggregates\"><\/span>National Income and Related Aggregates<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Various national income aggregates, estimated either at factor cost or market price, include:<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Factor_Cost\"><\/span>1. Factor Cost:<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ul class=\"wp-block-list\"><li>Refers to the cost of factors of production, such as rent, interest, wages, and profit.<\/li><li>Excludes indirect taxes and includes subsidies.<\/li><li>Factor costs encompass all production-related expenses incurred by producing firms or industries.<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Basic_Price\"><\/span>2. Basic Price:<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ul class=\"wp-block-list\"><li>The amount receivable by the producer for a unit of a good or service produced, excluding transport costs invoiced separately.<\/li><li>Basic price equals factor cost plus production taxes minus production subsidies.<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Market_Price\"><\/span>3. Market Price:<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ul class=\"wp-block-list\"><li>The price customers pay, including indirect taxes and subsidies.<\/li><li>National Income at factor cost is derived by deducting indirect taxes and adding subsidies to the market price.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Intermediate_Consumption_of_Goods\"><\/span>Intermediate Consumption of Goods:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Measures the value of goods and services consumed as inputs in the production process.<\/li><li>Excludes consumption of fixed assets recorded as consumption of fixed capital.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concepts_of_National_Income\"><\/span>Concepts of National Income<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Continuous Flow:<\/strong> National income is viewed as a continuous flow of goods and services produced over time, not as a stock available at any specific point.<\/li><li><strong>Inclusion Criteria: <\/strong>The concept encompasses the market price of all goods and services, with each item&#8217;s price counted only once to avoid double counting. Only the value of final goods and services is considered.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_Temporal_Aspect_of_National_Income\"><\/span>The Temporal Aspect of National Income<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>The concept of national income is bound by a fixed period, typically one year. Two fundamental concepts, namely national product and domestic product, serve as the foundation for various other forms and interpretations within the realm of national income calculation.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Gross_Domestic_Product_GDP\"><\/span>Gross Domestic Product (GDP)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Gross Domestic Product (GDP)<\/strong> represents the monetary value of all final goods and services produced within a country&#8217;s borders during a specific time period. The<strong> National Statistical Office (NSO)<\/strong> is responsible for estimating GDP.<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GDP_Equation\"><\/span>GDP Equation:<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p><em>GDP<\/em>=<em>C<\/em>+<em>I<\/em>+<em>G<\/em>+<em>NX<\/em><\/p>\n\n\n\n<p>Where,<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><em>C<\/em> = Consumption<\/li><li><em>I<\/em> = Investment<\/li><li><em>G<\/em> = Government Expenditure<\/li><li><em>NX<\/em> = Net Export<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GDP_at_Market_Price_GDP_MP\"><\/span>GDP at Market Price (GDP MP)<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ul class=\"wp-block-list\"><li>GDP at market price refers to the total value of all goods and services produced within the geographical boundaries of the country during a year. It considers the actual transacted price, including indirect taxes (e.g., excise duty, VAT, service tax, customs duty) and government subsidies. This approach has led to a consistent increase in GDP over the past decades.<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GDP_MP_Equation\"><\/span>GDP MP Equation:<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p><em>GDP <\/em><em>MP <\/em>\u200b=<em>GDP <\/em><em>PC <\/em>+(<em>IndirectTaxes<\/em>\u2212<em>Subsidies<\/em>)<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GDP_at_Factor_Cost_GDP_FC\"><\/span>GDP at Factor Cost (GDP FC)<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ul class=\"wp-block-list\"><li>GDP at factor cost represents the total value of goods and commodities produced in a year within a country by all production units at the factory level.<\/li><li>Understanding these concepts provides a comprehensive framework for assessing a country&#8217;s economic performance over a specific timeframe.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Government_Grants_and_Subsidies_in_GDP_Calculation\"><\/span>Government Grants and Subsidies in GDP Calculation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>In the calculation of GDP, government grants and subsidies are considered, whereas indirect taxes are excluded from the equation.<\/li><li>GDP o =GDPm \u2212(IndirectTaxes+Subsidies)<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GDP_at_Factor_Cost_FC_and_Market_Price_MP\"><\/span>GDP at Factor Cost (FC) and Market Price (MP)<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ul class=\"wp-block-list\"><li>Two essential variants of GDP, namely GDP at Factor Cost (GDP_FC) and GDP at Market Price (GDP_MP), are calculated as follows:<\/li><li>GDP MP =GNP MP \u2212(X\u2212M)<\/li><li>GDP FC =GNP FC \u2212(X\u2212M)<\/li><li>Where<\/li><li>X represents exports and<\/li><li>M represents imports of a country.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Economic_Growth_Rate\"><\/span>Economic Growth Rate<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>The annual percentage change in GDP is termed the economic growth rate, providing a quantitative measure of the economy&#8217;s growth over time.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Gross_Domestic_Savings\"><\/span>Gross Domestic Savings<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Gross domestic savings encompass savings from the household sector, private co-operative sector, and the public sector, including households, non-profit institutions (colleges, hospitals, etc.), and non-cooperative business units.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Methods_of_GDP_Calculation\"><\/span>Methods of GDP Calculation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Various methods are employed to calculate GDP, and one such approach is the Production Approach, also known as the Value Added Approach (VAP). This method assesses the value contributed at each stage of production, obtaining the value added by deducting the cost of goods and services used in the production process. The cost of these goods and services is referred to as intermediate consumption or intermediate inputs.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Significance_of_Value_Added_Method_in_GDP_Calculation\"><\/span>Significance of Value Added Method in GDP Calculation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>The Value Added Approach is valuable in addressing the counting of goods with imported inputs in GDP. It ensures that only the value of newly produced items is added, avoiding the problem of double counting, as the value of intermediate goods is not counted in this method.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Income_Approach_to_GDP_Calculation\"><\/span>Income Approach to GDP Calculation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>The income approach to calculating Gross Domestic Product (GDP) asserts that all economic expenditures should equate to the total income generated through the production of goods and services. This method measures GDP by aggregating incomes that firms pay households for factors of production, including wages for labor, interest for capital, rent for land, and profits for entrepreneurship.<\/li><\/ul>\n\n\n\n<p><strong>GDP=Total National Income+Sales Taxes+Depreciation+Net Foreign Factor Income<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Expenditure_Approach_to_GDP_Calculation\"><\/span>Expenditure Approach to GDP Calculation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>The expenditure approach, the most widely used GDP formula, is based on the money spent by various economic participants. This method considers consumption, investments, net exports, and government expenditure to calculate a nation&#8217;s annual GDP.<\/li><\/ul>\n\n\n\n<p><strong>GDP(Y)=C+I+G+(X\u2212M)<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/edukemy.com\/upsc\/upsc-cse-gs-integrated-course?utm_source=Blog&amp;utm_medium=Banner&amp;utm_campaign=GS+Integrated\" target=\"_blank\" rel=\"noreferrer noopener\"><img decoding=\"async\" width=\"1280\" height=\"300\" data-src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/8.png\" alt=\"\" class=\"wp-image-42401 lazyload\" data-srcset=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/8.png 1280w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/8-1170x274.png 1170w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/8-585x137.png 585w\" data-sizes=\"(max-width: 1280px) 100vw, 1280px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 1280px; --smush-placeholder-aspect-ratio: 1280\/300;\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Real_Gross_Domestic_Product_Real_GDP\"><\/span>Real Gross Domestic Product (Real GDP)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Real_GDP\"><\/span>Real GDP:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Real Gross Domestic Product (Real GDP) is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year. It is expressed in base-year prices and facilitates meaningful comparisons over time.<\/li><\/ul>\n\n\n\n<p>GDP Deflator\u00d7100 RealGDP= GDP Deflator NominalGDP \u00d7100<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Nominal_GDP\"><\/span>Nominal GDP:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Nominal GDP assesses economic production but includes current prices.<\/li><li>It considers factors like inflation, price changes, changing interest rates, and money supply during GDP determination.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Relevance_of_GDP\"><\/span>Relevance of GDP<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Gross Domestic Product (GDP) is crucial as it provides insights into the economy&#8217;s size and performance. The growth rate of real GDP is a key indicator of economic well-being, with an increase signaling a thriving economy.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Indias_Base_Year_Change_for_GDP_Computation\"><\/span>India&#8217;s Base Year Change for GDP Computation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Selecting a base year marks the initial phase in computing real GDP.<\/li><li>Indian statisticians, as part of revised GDP calculations, transitioned from the 2004-2005 base year to 2011-2012.&nbsp;<\/li><li>Such changes are routine, occurring approximately every five years.&nbsp;<\/li><li>The government has suggested 2017-2018 as the new base year for GDP and Index of Industrial Production (IIP), and 2018 for the Consumer Price Index (CPI).&nbsp;<\/li><li>This shift includes 6 sectors and 14 sub-sectors in the estimation of national income, a refinement from the previous 13 sub-sectors.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Gross_National_Product_GNP\"><\/span>Gross National Product (GNP)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>GNP represents the market value of all goods and services produced in a country within a year by its citizens and property.&nbsp;<\/li><li>It can be expressed as GNP = GDP + (X &#8211; M), where X denotes money flowing from foreign countries, and M signifies money flowing to foreign countries.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Gross_National_Product_at_Market_Price\"><\/span>Gross National Product at Market Price<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>GNP at market price encapsulates the final monetary value of goods and services produced by a country&#8217;s citizens in a specified period, typically a year.&nbsp;<\/li><li>The distinction from GDP lies in subtracting the income earned by foreigners within the country (M) and adding the income earned by Indians abroad (X). In a closed economy, where [X-M] = 0, GNP equals GDP.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Income_from_Abroad_in_GNP_Calculation\"><\/span>Income from Abroad in GNP Calculation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Income from abroad is a crucial component in GNP calculation, encompassing transactions made by Indian citizens abroad and vice versa. This includes<strong> income received from private remittances<\/strong>, <strong>interest on foreign<\/strong> debt, and foreign aid.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Gross_National_Product_at_Factor_Cost\"><\/span>Gross National Product at Factor Cost<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Under the factor cost, GNP includes income received from land, capital, labor, and enterprise.<\/li><li>Deducting net indirect taxes from GNP at market prices yields GNP at factor cost.<\/li><li>This calculation considers subsidies and indirect taxes, with the net indirect tax obtained by subtracting the subsidy from the indirect tax.<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-table\"><div class=\"pcrstb-wrap\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Difference Between GDP and GNP<\/strong><br><strong><br><\/strong>GDP encompasses all goods and services produced in a country, regardless of the producer&#8217;s nationality.<br><br>&nbsp;In contrast, GNP includes production by nationals abroad but excludes production by foreigners within the country.<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Net_National_Product_NNP\"><\/span>Net National Product (NNP)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>NNP represents the value of GNP with the deduction of plant and machinery depreciation.<\/li><li>It undergoes annual scrutiny as a method to gauge national income.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"National_Income_NI\"><\/span>National Income (NI)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>NI is derived from NNP by subtracting indirect taxes and adding subsidies, denoted as&nbsp;<\/li><li><strong>NI = NNP &#8211; Indirect taxes + Subsidies.<\/strong><\/li><li>Net Domestic Product at Market Price<\/li><li><strong>Net Domestic Product (NDP)<\/strong> is obtained by deducting the depreciation of machinery and capital from<strong> Gross Domestic Product (GDP).<\/strong><\/li><li>NDPMP is calculated as GDPMP &#8211; Depreciation, offering insights into economic losses due to depreciation.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Net_Domestic_Product_at_Factor_Cost\"><\/span>Net Domestic Product at Factor Cost<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Net Domestic Product at factor cost (NDPpc) is derived by subtracting net indirect taxes from NDP at market price. It reflects the sum total of factor income within the domestic territory during one accounting year, expressed as NDPpc = NDP &#8211; Net Indirect Taxes.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Real_National_Income_RNI\"><\/span>Real National Income (RNI)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>RNI is the inflation-adjusted value of National Income, computed using a reference point (base year).&nbsp;<\/li><li>The formula for RNI is RNI = NNP at current prices \u00d7 100\/Price Index.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Per-Capita_Income_PCI\"><\/span>Per-Capita Income (PCI)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>PCI gauges the earnings per person in a specific area, calculated as Per-Capita Income = National Income \/ Population of the Country.<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-table\"><div class=\"pcrstb-wrap\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Real Per Capita Income (RPCI)<\/strong><br><strong><br><\/strong>RPCI, a measure of people&#8217;s well-being, is obtained by dividing national income at constant prices by the total population of the country: RPCI = National Income at Constant Price \u00d7 100 \/ Total Population.<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Personal_Income_PI\"><\/span>Personal Income (PI)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>PI is the income of a country&#8217;s residents, considering transfer payments to individuals, minus social security contributions, corporate tax, and undistributed profits: Personal Income = National Income + Transfer payments &#8211; Social security contributions &#8211; Corporate tax &#8211; Undistributed profits.<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-table\"><div class=\"pcrstb-wrap\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Disposable Income (DI)<\/strong><br><strong><br><\/strong>DI is the income individuals have at their disposal after settling direct tax liabilities: Disposable Income = Personal Income &#8211; Direct taxes (e.g., Income tax).<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Other_Concepts_Related_to_National_Income\"><\/span>Other Concepts Related to National Income<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Net National Disposable Income: Calculated as Net Domestic Income + Net factor income from abroad + Net current transfers from the rest of the world.<\/li><li>Gross National Disposable Income: Computed as Net National Disposable Income + Current Replacement Cost.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Personal_Disposable_Income\"><\/span>Personal Disposable Income<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Personal disposable income is derived by subtracting direct taxes and miscellaneous fees and fines paid by households from personal income.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Factor_Income_Received_by_the_Private_Sector\"><\/span>Factor Income Received by the Private Sector<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Factor income received by the private sector<\/strong> from Net Domestic Product is calculated by subtracting government departmental enterprises&#8217; wealth and income from entrepreneurship savings of non-departmental enterprises from Net Domestic Product at factor cost.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Green_Economy\"><\/span>Green Economy<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>The <strong>green economy <\/strong>focuses on addressing environmental risks and ecological scarcity while aiming for sustainable development without degrading the environment.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Green_GDP\"><\/span>Green GDP<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Green GDP<\/strong> involves creating an economic development index that accounts for environmental consequences.&nbsp;<\/li><li>The Green Index measures the environmental impact of economic development, considering factors like damage to biodiversity.<\/li><li>&nbsp;It is calculated by subtracting the monetary value of net natural capital consumption from Gross Domestic Product.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Green_GNP\"><\/span>Green GNP<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Green GNP<\/strong> represents the maximum per capita production achievable while keeping the country&#8217;s natural resources constant.&nbsp;<\/li><li>Introduced in 1995, it factors in gross addition and natural (environmental) depletion.<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-table\"><div class=\"pcrstb-wrap\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Green National Income<\/strong><br><strong><br>Green national income<\/strong>, a part of green accounting, subtracts the decay costs of nature-provided resources used in enhancing national products from national income.<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n<figure class=\"wp-block-table\"><div class=\"pcrstb-wrap\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Gross Environmental Product<\/strong><br><strong><br><\/strong>Gross Environmental Product is an index of economic development with environmental consequences, revealing the impact of a country&#8217;s actions on biodiversity and the environment.<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Potential_GDP\"><\/span>Potential GDP<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Potential GDP anticipates future higher levels of economic production.<\/li><li>It is linked to the actual money value of goods and services produced when factors of production are fully employed.&nbsp;<\/li><li>Determinants include political stability, technological progress, a competitive market, labor availability, physical capital usage, skill ability, distribution of labor, and proper utilization of human resources.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Gross_Value_Added_GVA\"><\/span>Gross Value Added (GVA)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>In 2015, India transitioned its national accounts compilation to conform with the <strong>United Nations&#8217; System of National Accounts<\/strong> (SNA) of 2008.<\/li><li><strong>GVA<\/strong> is defined as the value of output minus the value of intermediate consumption, measuring the contribution to growth made by an individual producer, industry, or sector.<\/li><li>It represents the rupee value of goods and services produced in an economy after deducting the cost of inputs and raw materials. GVA = GDP + Subsidies on Products &#8211; Taxes on Products.<\/li><li>The new methodology shifted from measuring GVA at factor cost to GVA at basic prices as the primary measure of economic output.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GVA_Calculation_Methods\"><\/span>GVA Calculation Methods<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>GVA at basic prices incorporates production taxes and excludes production subsidies.&nbsp;<\/li><li>On the other hand, GVA at factor cost includes no taxes and excludes no subsidies.&nbsp;<\/li><li>The shift from the base year of 2004-05 to 2011-12 has been implemented.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GVA_vs_GDP\"><\/span>GVA vs. GDP<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>GVA represents the value added to a product, enhancing various aspects, while GDP is the total quantity of products produced in a country.&nbsp;<\/li><li>GDP includes private consumption, gross investment, government investment, government spending, and net foreign trade (exports minus imports).<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-table\"><div class=\"pcrstb-wrap\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Hindu Growth Rate<br><\/strong><br>Coined by economist<strong> Professor Rajkrishna<\/strong> in 1978, the Hindu Growth Rate refers to the slow growth of the Indian economy under socialistic economic policies.&nbsp;<br><br>It stagnated around 3.5% from the 1950s to the 1980s, with per capita income growth averaging 1.3%.<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Calculating_National_Income\"><\/span>Calculating National Income<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Simon Kuznets identified three methods to calculate national income:<ul><li><strong>Product Method:<\/strong> Obtains the net value of final goods and services produced in a country, known as Total Final Product (TFP).<\/li><li><strong>Income Method:<\/strong> Gathers the total net income earned by individuals in various sectors, including rent, wages, interest, and profit.<\/li><li><strong>Consumption Method: <\/strong>Also called the Expenditure Method, adds total consumption and total saving to calculate National Income (NI).<\/li><\/ul><\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Problems_in_Calculating_National_Income\"><\/span>Problems in Calculating National Income<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Black Money:<\/strong> Illegal activities and unreported income contribute to tax evasion and corruption, remaining outside GDP estimates.<\/li><li><strong>Non-Monetisation:<\/strong> Informal transactions in the rural economy, known as the Non-Monetised Economy, keep GDP estimates lower than the actual.<\/li><li><strong>Growing Service Sector: <\/strong>The service sector, including BPO, legal consultancy, health, and financial services, lacks accurate reporting, leading to an underestimation of national income.<\/li><li><strong>Double Counting:<\/strong> Despite corrective measures, eliminating double counting remains challenging, posing a hurdle to accurate GDP estimates.<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-table\"><div class=\"pcrstb-wrap\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Estimation of National Income in India<\/strong><br><strong><br>Dadabhai Naoroji&#8217;s<\/strong> 1867-1868 attempt estimated Per-Capita Income to be 20.<br><br><strong>Professor VKRV Rao&#8217;s <\/strong>1931-1932 <strong>scientific method<\/strong> was unsatisfactory.<br><br>The National Income Committee, led by Professor <strong>PC Mahalanobis<\/strong> in 1949, made the first official attempt.<br><br>The National Income Committee Report (1954) stated India&#8217;s National Income as 8710 crores and Per-Capita Income as 225 in 1948-1949.<br><br><strong>The National Statistical Office<\/strong> (NSO) under the Ministry of Statistics and Programme Implementation is responsible for estimating and publishing National Income in India.<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Limitations_in_Measuring_National_Incomes\"><\/span>Limitations in Measuring National Incomes<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>When measuring National Income, certain limitations, challenges, and problems need to be considered:<ul><li><strong>Domestic Economic Performance vs. Social Welfare: <\/strong>National income measures domestic economic performance, not social welfare, despite the expectation of a strong positive correlation.<\/li><li><strong>Understatement of Social Welfare:<\/strong> National income understates social welfare as it doesn&#8217;t account for non-market transactions like home-makers services and do-it-yourself projects. It also fails to measure changes in leisure, work satisfaction, and product quality.<\/li><li><strong>Environmental Changes:<\/strong> National income does not accurately reflect changes in the environment. While activities like oil spill clean-up are measured as positive output, increased pollution is not measured as negative.<\/li><li><strong>Per-capita income as a Better Measure<\/strong>: Per-capita income is considered a more meaningful measure of living standards than total national income. The problem of double counting can be avoided using the value-added approach.<\/li><li><strong>Depreciation Estimation Issues: <\/strong>Problems arise in estimating depreciation accurately.<\/li><\/ul><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Net_National_Income_NNI\"><\/span>Net National Income (NNI)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Definition:<\/strong> NNI is defined as <strong>Gross National Income <\/strong>(GNI) minus the depreciation of fixed capital assets through wear and tear and obsolescence.<\/li><li><strong>Net of Consumption of Fixed Capital (CFC): <\/strong>It is &#8216;net&#8217; of Consumption of Fixed Capital (CFC) or depreciation, representing the decline in the value of fixed assets used in production.<\/li><li><strong>Comparison Between Countries:<\/strong> The difference between Net National Income and Gross National Income lies in consumption of fixed capital, making NNI a comparable metric between countries.<\/li><li><strong>Formula for NNI: <\/strong>NNI = C + I + G + X + NFFI &#8211; IT &#8211; D<\/li><\/ul>\n\n\n\n<p>Where:<\/p>\n\n\n\n<p>C = Consumption<\/p>\n\n\n\n<p>I = Investment<\/p>\n\n\n\n<p>G = Government spending<\/p>\n\n\n\n<p>X = Net exports<\/p>\n\n\n\n<p>N = Net Foreign Factor Income (NFFI)<\/p>\n\n\n\n<p>D = Depreciation<\/p>\n\n\n\n<p>IT = Indirect Taxes<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/edukemy.com\/refer-and-earn\" target=\"_blank\" rel=\"noreferrer noopener\"><img decoding=\"async\" width=\"1280\" height=\"300\" data-src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/09\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-10-1.png\" alt=\"\" class=\"wp-image-46428 lazyload\" data-srcset=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/09\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-10-1.png 1280w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/09\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-10-1-1170x274.png 1170w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/09\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-10-1-585x137.png 585w\" data-sizes=\"(max-width: 1280px) 100vw, 1280px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 1280px; --smush-placeholder-aspect-ratio: 1280\/300;\" \/><\/a><figcaption><a href=\"https:\/\/edukemy.com\/refer-and-earn\" target=\"_blank\" rel=\"noopener\" title=\"\">Refer &amp; Earn NOW<\/a><\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Indian_Organizations_Related_to_National_Income_Accounts\"><\/span>Indian Organizations Related to National Income Accounts<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>Several key organizations play a role in the calculation of national income in India:<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Ministry_of_Statistics_and_Programme_Implementation\"><\/span>Ministry of Statistics and Programme Implementation:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Responsible for coverage and quality aspects of statistics released.<\/li><li>Conducts surveys based on scientific sampling methods.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"National_Statistical_Office_NSO\"><\/span>National Statistical Office (NSO):<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Formed by merging the <strong>Central Statistical Office <\/strong>(CSO) and National Sample Survey Office (NSSO).<\/li><li>Conducts large-scale sample surveys in various fields across India.<\/li><li>Divisions include Survey <strong>Design and Research Division (SDRD)<\/strong> and Field Operations Division (FOD).<\/li><li><strong>Data Processing Division (DPD): <\/strong>Headquartered in Kolkata with five additional Data Processing Centers, DPD oversees sample selection, software development, processing, validation, and tabulation of survey data.&nbsp;<\/li><li>The Price and Wages in Rural India, collected through schedule 3.01 (R), undergo processing at DPC Giridih. Additionally, DPD handles data processing for the <strong>Periodic Labour Force Survey (PLFS).<\/strong><\/li><li><strong>Industrial Statistics Wing (IS Wing), DPD, NSO, Kolkata:<\/strong> Responsible for sample selection, data processing, validation, and tabulation of Annual Survey of Industries (ASI) data collected through a dedicated web portal.<\/li><li><strong>Survey Coordination Division (SCD): <\/strong>Situated in New Delhi, SCD coordinates all NSO division activities, publishes the bi-annual journal &#8220;Sarvekshana,&#8221; and organizes National Seminars on results from various socio-economic surveys conducted by NSO.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Central_Statistical_Office_CSO\"><\/span>Central Statistical Office (CSO):<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Established on May 2, 1951, CSO is a key wing of NSO, responsible for <strong>coordinating statistical activities,<\/strong> and evolving and <strong>maintaining statistical standards<\/strong>. Its tasks include compiling national accounts, conducting annual surveys of industries, economic censuses, and handling various social statistics.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"National_Sample_Survey_Office_NSSO\"><\/span>National Sample Survey Office (NSSO):<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Founded in 1950, NSSO conducts large-scale sample surveys to meet the country&#8217;s data needs for estimating national income and other aggregates.<\/li><li>NSSO undertakes fieldwork for the Annual Survey of Industries nationwide, excluding <strong>Jammu and Kashmir<\/strong>.&nbsp;<\/li><li>It also conducts the All India household consumer expenditure survey, a primary data source on the living standards of the Indian population.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"National_Statistical_Commission_NSC\"><\/span>National Statistical Commission (NSC):<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Established on June 1, 2005, following Cabinet acceptance of the <strong>Rangarajan Commission&#8217;s <\/strong>recommendations in 2001.&nbsp;<\/li><li>NSC, formed with effect from July 12, 2006, is tasked with evolving policies, priorities, and standards in statistical matters.&nbsp;<\/li><li>The commission comprises a Chairperson and four members, each with specialization and experience in specific statistical fields.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Growth_and_Structure_Trends_in_National_Income\"><\/span>Growth and Structure Trends in National Income<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>The Real GDP (Gross Domestic Product) at constant (2011-2012) prices for the fiscal year 2022-2023 are currently projected to reach 236.65 lakh crore.<\/li><li>The National Statistical Office (NSO), under the Ministry of Statistics and Programme Implementation, has recently unveiled revised GDP figures.<\/li><li>According to the new series with a base year of 2011-2012, India&#8217;s GDP at constant prices is expected to exhibit an 8.68% growth for the fiscal year 2022-2023.<\/li><li>The Per Capita Income in real terms (at 2011-2012 prices) for the year 2022-2023 is anticipated to reach 1,44,565, compared to 1,07,801 in the previous fiscal year 2021-2022.<\/li><li>The Per Capita Income at current prices for the Fiscal Year (FY) 2022 is reported at 93,000, reflecting a significant decline attributed to the impact of the COVID-19 pandemic.<\/li><li>As industrialization continues to expand, there is a noticeable improvement in the share of the industry and services sectors in the overall GDP composition.&nbsp;<\/li><li>However, the transformation in India&#8217;s economic structure is gradual due to the slow growth rate in the manufacturing sector.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Prelims_Facts\"><\/span>Prelims Facts<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>The national income of a country for a given period is equal to the -Money value of final goods and services produced <strong><em>(IAS (Pre) 2013)<\/em><\/strong><\/li><li>What represents the gross national product at market price minus depreciation and indirect taxes plus subsidies? National income <strong><em>[IAS (Pre) 2001)<\/em><\/strong><\/li><li>The net national product at market price is the gross national product at market price-depreciation [RAS\/RTS (Pre) 2021]<\/li><li>One of the problems in calculating national income in India is the unorganized sector <strong><em>(BPSC (Pre) 2017)<\/em><\/strong><\/li><li>Who first estimated the national income in India? -Dadabhai Naoroji <strong><em>(UPPSC (Mains) 2013]<\/em><\/strong><\/li><li>Theoretically, if economic growth is conceptualized, which is not usually taken into consideration? -Growth in financial aid from World Bank<strong><em> [JPSC (Pre) 2013]<\/em><\/strong><\/li><li>Who was the Chairman of the National Income Committee appointed by the Government of India in 1949? PC Mahalanobis <strong><em>(UPPSC (Mains) 2015]<\/em><\/strong><\/li><li>Which is the correct base year for measuring national income in India? -2004 to 2005 <strong><em>[UP UDA\/LDA (Pre) 2010<\/em><\/strong><\/li><li>In national income accounting, the year whose prices are being used to calculate the real GDP is known as the Base year [RAS\/RTS (Pre) 2021, UPPSC (Pre) 2005<\/li><li>Which economist, for the first time scientifically determined the national income in India? VK RV Rao<strong><em> [UPPSC (Pre) 2015]<\/em><\/strong><\/li><li>Who gave the view that &#8216;Planning in India should in future, pay more attention to the people than to commodities&#8217;?<\/li><li>What is the vital change in the measurement of national income of India recently? Amartya Sen<strong><em> (UPPSC (Pre) 2008)<\/em><\/strong><\/li><li>Both the base year and calculation method have changed <strong><em>[UPPSC (Pre) 2010, RAS\/RTS (Pre) 2013)<\/em><\/strong><\/li><li>If over a given period, both prices and monetary Income have been doubled, the real income will be Unchanged<strong><em> [UPPSC (Mains) 2004, UPPSC (Pre) 2016<\/em><\/strong><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"UPSC_NCERT_Practice_Questions\"><\/span>UPSC NCERT Practice Questions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_The_national_income_of_a_country_for_a_given_period_is_equal_to_the_IAS_Pre_2013\"><\/span>1. The national income of a country for a given period is equal to the IAS (Pre) 2013<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>(a) the total value of goods and services produced by the nationals.<\/p>\n\n\n\n<p>(b) the sum of the total consumption and investment expenditure.<\/p>\n\n\n\n<p>(c) the sum of personal income of all individuals.<\/p>\n\n\n\n<p>(d) the money value of final goods and services produced.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_The_term_%E2%80%98national_income_represents\"><\/span>2. The term &#8216;national income represents<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>(a) Gross National Product (GNP) at market prices minus depreciation.<\/p>\n\n\n\n<p>(b) Gross National Product (GNP) at market prices minus depreciation plus net factor income from abroad.<\/p>\n\n\n\n<p>(c) Gross National Product (GNP) at market prices minus depreciation and indirect taxes plus subsidies.<\/p>\n\n\n\n<p>(d) Gross National Product (GNP) at market prices minus net factor income from abroad.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Consider_the_following_statements_concerning_the_Indian_economy_IAS_Pre_2010\"><\/span>3. Consider the following statements concerning the Indian economy IAS (Pre) 2010<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ol class=\"wp-block-list\"><li>The GDP has increased by four times in the last 10 years.<\/li><li>The percentage share of the public sector in GDP has declined in the last 10 years.<\/li><\/ol>\n\n\n\n<p>Which of the statement(s) given above is\/are correct?<\/p>\n\n\n\n<p>(a) Only 1<\/p>\n\n\n\n<p>(b) Only 2<\/p>\n\n\n\n<p>(c) Both 1 and 2<\/p>\n\n\n\n<p>(d) Neither 1 nor 2<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_Consider_the_following_statements_with_reference_to_the_Indian_economy_IAS_Pre_2015\"><\/span>4. Consider the following statements with reference to the Indian economy IAS (Pre) 2015<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ol class=\"wp-block-list\"><li>The rate of growth of Real Gross Domestic Product has steadily increased in the last decade.<\/li><li>The Gross Domestic Product at Market Price (in rupees) has steadily increased in the last decade.&nbsp;<\/li><\/ol>\n\n\n\n<p>Which of the statement(s) given above is\/are correct?<\/p>\n\n\n\n<p>(a) Only 1<\/p>\n\n\n\n<p>(b) Both 1 and 2<\/p>\n\n\n\n<p>(c) Only 2<\/p>\n\n\n\n<p>(d) Neither 1 nor 2<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_The_national_income_of_a_country_for_a_given_period_is_equal_to_the_IAS_Pre_2013\"><\/span>5. The national income of a country for a given period is equal to the IAS (Pre) 2013<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>(a) value of goods and services produced by the nationals.<\/p>\n\n\n\n<p>(b) sum of total consumption and investment expenditure.<\/p>\n\n\n\n<p>(c) sum of personal income of all individuals.<\/p>\n\n\n\n<p>(d) money value of final goods and services produced.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6_The_Net_National_Product_at_Market_Price_NNPMP_is_RASRTS_Pre_2021\"><\/span>6. The Net National Product at Market Price (NNPMP) is RAS\/RTS (Pre) 2021<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>(a) Gross National Product at market price-net income from abroad.<\/p>\n\n\n\n<p>(b) Gross National Product at market price-transfer payments.<\/p>\n\n\n\n<p>(c) Gross National Product at market price-depreciation.<\/p>\n\n\n\n<p>(d) Gross National Product at market price-subsidies<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"7_One_of_the_problems_in_calculating_national_income_in_India_is_BPSC_Pre_2017\"><\/span>7. One of the problems in calculating national income in India is BPSC (Pre) 2017<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>(a) underemployment<\/p>\n\n\n\n<p>(b) inflation<\/p>\n\n\n\n<p>(c) low level of savings<\/p>\n\n\n\n<p>(d) non-organised sector<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"8_Base_year_in_national_income_accounting_means_UPPSC_Pre_2005_RASRTS_Pre_2021\"><\/span>8. Base year&#8217; in national income accounting means UPPSC (Pre) 2005, RAS\/RTS (Pre) 2021<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>( a) the year whose income&nbsp; is being used to calculate the nominal GDP&nbsp;<\/p>\n\n\n\n<p>(b) the year whose prices are being used to calculate the nominal GDP&nbsp;<\/p>\n\n\n\n<p>(c) the year whose prices are being used to calculate the real GDP<\/p>\n\n\n\n<p>(d) the year whose income is being used to calculate the real GDP<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"9_Indicate_the_vital_change_in_the_measurement_of_national_income_of_India_recently_UPPSC_Pre_2005_RASRTS_Pre_2021\"><\/span>9. Indicate the vital change in the measurement of national income of India recently UPPSC (Pre) 2005, RAS\/RTS (Pre) 2021<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>(a) both the base year and calculation method have changed<\/p>\n\n\n\n<p>(b) base year has been changed from 2004-2005 to 2011-2012<\/p>\n\n\n\n<p>(c) calculation has changed from factor cost to market prices<\/p>\n\n\n\n<p>(d) calculation has changed from current prices to constant prices<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"10_Net_National_Product_NNP_and_Gross_National_Product_GNP_are\"><\/span>10. Net National Product (NNP) and Gross National Product (GNP) are<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>(a) value measures of the national product.<\/p>\n\n\n\n<p>(b) valuation of national product of factor cost.<\/p>\n\n\n\n<p>(c) value measures of exports.<\/p>\n\n\n\n<p>(d) both are different.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"11_Consider_the_following_statements\"><\/span>11. Consider the following statements: <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Statement 1 Net Domestic Product = Gross Domestic Product + Depreciation.<\/p>\n\n\n\n<p>Statement 2 Per-Capita Income-Net Domestic Product\/Total population of the nation. <\/p>\n\n\n\n<p>Statement 3 Net Domestic Product is the better tries than Gross Domestic Product for comparing the economies of the world. CGPSC (Pre) 2020<\/p>\n\n\n\n<p>Codes<\/p>\n\n\n\n<p>(a) Statements 1, 2 and 3 all are true.<\/p>\n\n\n\n<p>(b) Only statement I and statement 2 are true.<\/p>\n\n\n\n<p>(c) Only statement 2 and statement 3 are true.<\/p>\n\n\n\n<p>(d) None of the above statements are true.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"12_Economic_development_is_usually_coupled_with_IAS_Pre_2011_2019\"><\/span>12. Economic development is usually coupled with IAS (Pre) 2011, 2019<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>(a) deflation<\/p>\n\n\n\n<p>(b) inflation<\/p>\n\n\n\n<p>(c) stagflation&nbsp;<\/p>\n\n\n\n<p>(d) hyper<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"13_Hindu_growth_rate_is_related_to_UPPSC_Pre_1996_2006_and_BPSC_Pre_2019\"><\/span>13. Hindu growth rate is related to UPPSC (Pre) 1996, 2006, and BPSC (Pre) 2019<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>(a) money<\/p>\n\n\n\n<p>(c) population<\/p>\n\n\n\n<p>(b) gross domestic product<\/p>\n\n\n\n<p>(d) gross national product<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"14_Which_of_the_following_is_not_a_method_to_calculate_the_Gross_Domestic_Product_GDP\"><\/span>14. Which of the following is not a method to calculate the Gross Domestic Product (GDP)?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>(a) Product method<\/p>\n\n\n\n<p>(c) Income method<\/p>\n\n\n\n<p>(b) Diminishing&nbsp;<\/p>\n\n\n\n<p>(d) Expenditure method<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"15_Which_of_the_following_statements_isare_correct\"><\/span>15. Which of the following statement(s) is\/are correct?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>1. If a country is experiencing an increase in its GDP per capita, then its GDP must necessarily be Increasing.<\/p>\n\n\n\n<p>2. If a country is experiencing negative inflation, then its GDP will be decreasing.<\/p>\n\n\n\n<p>Codes<\/p>\n\n\n\n<p>(a) Only 1<\/p>\n\n\n\n<p>(b) Only 2<\/p>\n\n\n\n<p>(c) Both 1 and 2<\/p>\n\n\n\n<p>(d) Neither 1 nor 2<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"16_The_proportion_of_labor_in_Gross_National_Product_GNP_becomes_low_due_to_the_following_reasons\"><\/span>16. The proportion of labor in Gross National Product (GNP) becomes low due to the following reasons<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>(a) prices lag behind wages<\/p>\n\n\n\n<p>(b) profit lags behind prices<\/p>\n\n\n\n<p>(c) prices lag behind profit<\/p>\n\n\n\n<p>(d) wages lag behind prices<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"17_Growth_in_absolute_and_per-capita_real_GNP_does_not_indicate_a_high_rate_of_economic_growth_if_IAS_Pre_2018\"><\/span>17. Growth in absolute and per-capita real GNP does not indicate a high rate of economic growth if IAS (Pre) 2018<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>(a) industrial production fails to grow agricultural production goes.<\/p>\n\n\n\n<p>(b) agricultural production failed to grow along with industrial production.<\/p>\n\n\n\n<p>c) poverty and unemployment increases.<\/p>\n\n\n\n<p>(d) imports grow faster than exports.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"18_Despite_being_a_high-saving_economy_capital_formation_may_not_result_in_a_significant_increase_in_output_due_to_IAS_Pre_2018\"><\/span>18. Despite being a high-saving economy, capital formation may not result in a significant increase in output due to IAS (Pre) 2018<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>(a) weak administrative machinery<\/p>\n\n\n\n<p>(b) illiteracy<\/p>\n\n\n\n<p>(c) high population density<\/p>\n\n\n\n<p>(d) high capital-output ratio<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Know_Right_Answer\"><\/span>Know Right Answer<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>1. (c)<\/p>\n\n\n\n<p>2. (d)<\/p>\n\n\n\n<p>3. (b)<\/p>\n\n\n\n<p>4. (b)<\/p>\n\n\n\n<p>5. (b)<\/p>\n\n\n\n<p>6. (a)<\/p>\n\n\n\n<p>7. (a)<\/p>\n\n\n\n<p>8. (a)<\/p>\n\n\n\n<p>9. (c)<\/p>\n\n\n\n<p>10. (b<\/p>\n\n\n\n<p>11. (c)<\/p>\n\n\n\n<p>12. (a)<\/p>\n\n\n\n<p>13. (d)<\/p>\n\n\n\n<p>14. (c)<\/p>\n\n\n\n<p>15. (d)<\/p>\n\n\n\n<p>16. (a)<\/p>\n\n\n\n<p>17. (c)<\/p>\n\n\n\n<p>18. (d)<\/p>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><a href=\"https:\/\/edukemy.com\/upsc\/upsc-essay?utm_source=Blog&amp;utm_medium=Banner&amp;utm_campaign=Essay\" target=\"_blank\" rel=\"noreferrer noopener\"><img decoding=\"async\" data-src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/UPSC-Essay-Course-1280\u00d7300-1-3.svg\" alt=\"\" class=\"wp-image-42688 lazyload\" width=\"781\" height=\"182\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 781px; --smush-placeholder-aspect-ratio: 781\/182;\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions_FAQs\"><\/span>Frequently Asked Questions (FAQs)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Q1_What_is_National_Income_and_why_is_it_important_in_the_context_of_the_Indian_economy\"><\/span>Q1: What is National Income and why is it important in the context of the Indian economy?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A1: National Income is the total value of all goods and services produced within a country&#8217;s borders in a specific time period. It includes the income earned by the citizens and businesses of the country, both domestically and abroad. In the context of the Indian economy, National Income serves as a key indicator of the country&#8217;s economic health and development. It helps policymakers assess the overall performance of the economy, formulate effective economic policies, and measure the standard of living of the citizens.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Q2_How_is_Gross_Domestic_Product_GDP_calculated_and_what_are_its_components_in_the_context_of_Indian_National_Income\"><\/span>Q2: How is Gross Domestic Product (GDP) calculated, and what are its components in the context of Indian National Income?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A2: GDP, a crucial component of National Income, is calculated using three approaches: the production approach, income approach, and expenditure approach. In the production approach, GDP is calculated by summing up the value of all goods and services produced in various sectors. The income approach involves adding up all incomes earned by factors of production (such as wages, profits, and rents). The expenditure approach calculates GDP by summing up all expenditures on final goods and services. In the context of Indian National Income, GDP components include consumption expenditure, investment expenditure, government expenditure, and net exports (exports minus imports).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Q3_What_role_does_the_Central_Statistical_Office_CSO_play_in_compiling_National_Income_data_for_the_Indian_economy\"><\/span>Q3: What role does the Central Statistical Office (CSO) play in compiling National Income data for the Indian economy?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A3: The Central Statistical Office (CSO) is responsible for compiling and releasing National Income data for the Indian economy. It operates under the Ministry of Statistics and Programme Implementation. The CSO gathers information from various sources, such as government departments, businesses, and surveys, to estimate the economic activities in different sectors. By using this data, the CSO calculates GDP and other related indicators. The CSO&#8217;s role is crucial in providing accurate and timely information to policymakers, researchers, and the public, helping them make informed decisions about economic policies and interventions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"In_case_you_still_have_your_doubts_contact_us_on_9811333901\"><\/span><strong>In case you still have your doubts, contact us on 9811333901.<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>For UPSC Prelims Resources,&nbsp;<a href=\"https:\/\/edukemy.com\/upsc-cse-prelims-resource-centre\" target=\"_blank\" rel=\"noreferrer noopener\">Click here<\/a><\/p>\n\n\n\n<p>For Daily Updates and Study Material:<\/p>\n\n\n\n<p>Join our Telegram Channel &#8211;&nbsp;<a href=\"https:\/\/t.me\/WithEdukemy4IAS\" target=\"_blank\" rel=\"noreferrer noopener\">Edukemy for IAS<\/a><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>1. Learn through Videos &#8211;&nbsp;<a href=\"https:\/\/bit.ly\/3vOD8sU\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a><\/li><li>2. Be Exam Ready by Practicing Daily MCQs &#8211;&nbsp;<a href=\"https:\/\/bit.ly\/3Q9z2nF\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a><\/li><li>3. Daily Newsletter &#8211; Get all your Current Affairs Covered &#8211;&nbsp;<a href=\"https:\/\/bit.ly\/3bE2y5J\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a><\/li><li>4. Mains Answer Writing Practice &#8211;&nbsp;<a href=\"https:\/\/bit.ly\/3mZuVxl\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a><\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Visit_our_YouTube_Channel_%E2%80%93_here\"><\/span>Visit our YouTube Channel &#8211;&nbsp;<a href=\"https:\/\/www.youtube.com\/@ShabbirsEduKemyforIAS\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a><span class=\"ez-toc-section-end\"><\/span><\/h4>\n","protected":false},"excerpt":{"rendered":"<p>National Income serves as a foundational pillar in understanding the economic landscape of a nation, encompassing the total value of goods and services produced within its borders over a specified period<\/p>\n","protected":false},"author":17,"featured_media":21028,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[1227],"tags":[1038,1052,232,140],"class_list":["post-21027","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ncert-economy-notes","tag-national-income","tag-ncert-notes","tag-upsc","tag-upsc_preparation_strategy"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts\/21027","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/comments?post=21027"}],"version-history":[{"count":6,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts\/21027\/revisions"}],"predecessor-version":[{"id":34507,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts\/21027\/revisions\/34507"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/media\/21028"}],"wp:attachment":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/media?parent=21027"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/categories?post=21027"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/tags?post=21027"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}