National Income (NY) Computation in India - Presentation
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Transcript of National Income (NY) Computation in India - Presentation
NATIONAL INCOME (NY) COMPUTATION IN INDIA –
CONCEPTUAL & METHODOLOGICAL ISSUES
Presented by :- ITM – Vile Parle -XMBA01
Amit Kolwankar, Bhavesh Thakor,
Narendra Purohit, Suchitra Joshi,
& Swapnil Mahendrakar
POINTS TO COVERED DURING PRESENTATION Background Definition of National Income (NY) Basic Measures of NY Circular Flow of Income Methodology for Calculating NY Advantages & Limitations
BACKGROUND How does one measure Performance of
an Economy?Level of Production (Goods & Services)Total Economic Activity
Measures used for Estimate the Total Value of Production in Economy
India –Computation Since 1856, spearheaded by
Dadabhai NavrojeeCentral Statistical Organisation (CSO)
DEFINITIONNational Income Committee of India –
National Income estimate Measures the Volume of Commodities and Services turned out during a given period without duplicationIrving Fishing –
The National Income dividend or income consists of solely of Services as received by ultimate consumers, whether from their material of their human environment
BASIC MEASURES Gross National Product (GNP) is the total
value of Output produced and Income received in year by domestic residents of a countryOutput - refers goods and services
produced for final use Income – Earned by Citizens abroad minus
income earned by foreigners in country GNP is a Crude indicator for Living
Standard
BASIC MEASURES Gross Domestic Product (GDP) is the
total value of Output produced by Factors of Production located within the countryOutput – refers Goods and Services
produced for Final UseFactors of Production – Land, Labour, Capital
& Entrepreneurship GDP Indicates Productive Capacity of
Economy GDP is more popular measure than GNP
BASIC MEASURESNational Income and Output (Rs. In Crores) for Period Ending 2007
Gross National Product 11,059.3
Net Indian Income Receipts from rest of the World
55.2
Indian Income Receipts 329.1
Indian Income Payments 273.9
Gross Domestic Product 11,004.1
Private Consumption of fixed capital 1135.9
Government Consumption of fixed capital 218.1
Statistical Discrepancies 25.6
National Income 9,679.7
OTHER MEASURES Net National Product (NNP) is arrived by
deducting “Capital Depreciation” from GNP
Net Domestic Product (NDP) is arrived by deducting “Capital Depreciation” from GDP Capital Depreciation – Wear & Tear on Machinery,
Technology Degradation, etc.
Per Capita Income (PI / PCI) is arrived by dividing GDP by Size of Population
BASIC FROMULA’SGDP = GNP – Net Income Earned from
Abroad
NNP = GNP – Depreciation
NDP = GDP – Depreciation
PCI / PI = GDP / Size of Population
OTHER MEASURES Nominal GDP Growth Rate is value of
Output expressed in Current Price Real GDP Growth Rate is value of output
expressed in prices of Base yearYear 2000
Nominal GDP $100B &Real GDP $ 100BYear 2001
Nominal GDP $110B &Real GDP $ 105BNominal GDP Growth Rate = 10%Real GDP Growth Rate = 5%
CIRCULAR FLOW OF INCOME
METHODOLOGY FOR COMPUTING NATION AL INCOME Product or Output Method
GDP is calculated by adding the total value of output produced by all activities
There’s a Problem of Double-Counting, the output of many businesses is inputs for other businesses
METHODOLOGY FOR COMPUTING NATION AL INCOME Income Method –
GDP is calculated by adding all the income earned by various factors of production Wages and Salaries Income of Self-Employed Profits Interest Rent Surplus of Government Enterprises Net Flow Income from Abroad
METHODOLOGY FOR COMPUTING NATION AL INCOME Expenditure Method –
GDP is calculated by adding all the Expenditures made in the Economy GDP = E = C + I + G + (X – M)
E = Aggregate ExpenditureC = Consumption Expenditure I = Domestic InvestmentsG = Government ExpendituresX = Exports of Goods and ServicesM = Imports of Goods and Services
ADVANTAGES CALCULATION OF NY Design / Redesign Development Policies Forecasting Future Demand Facilitate International Comparison
PROBLEMS IN CALCULATION OF NY Underground Economy / Black Money Non – Monetization Growing Service Sector Household Services Social Services Environmental Cost
REFERENCES www.marketreasearchanalyst.com www.economist .com/countries/india www.wikipedia.org
CLOSER LOOK AT THE TEAM MEMBERS
Thank You