National Income is the total money value of all goods and services produced in a financial year. The national income of India is calculated by “Central Statistical Organization”.

Note- Financial year of India is from 1^st April to 30^th March.

National Income Notes

Changes which come with increase in national income

• Growth of the country increases
• Employment increases

Important measures of National Income

GDP

1. It means “Gross Domestic Product”
2. It is total monetary value of all final goods and services produced within the boundary of a country in a financial year
3. In India, it is calculated by “Ministry of Statistics and Program implementation”
4. GDP = Consumption + Investment + Govt expenditures + Exports – Imports

GNP

1. It means “Gross National Products”
2. It is the total monetary value of all goods and services produced by normal residents (people of India living anywhere in the world) in a financial year
3. GNP = GDP +Net income inflow from overseas – Net income outflow to foreign

NDP

• it means “Net Domestic Products”
• it is annual measure of economic output of a nation calculated by subtracting depreciation from GDP
• NDP = GDP – Depreciation

NOTE –  GDP is always greater than NDP

National Income Notes

NNP –

• it means “Net National Products”
• it is purest form of national income
• NNP = GNP – Depreciation
• Per Capita Income = NNP/Total population

Depreciation

• Decrease in the monetary value of an asset over time
• It is different for different assets
• It is published by “Ministry of Commerce”

National income question Answers