Presentation on Topic National income analysis

Presented By J&T JYA <JYANT@JYANT.IN>

Contents Introduction To Topic Introduction To Concern Objectives Of The Study References Data Accumulated Conclusions Recommendations

Introduction To Topic National income refers to the market value of the goods & services produced by an economy during the period of one year, without duplication. National income is the money value of all final goods & services produced in a country during a period in one year. Low income>low savings>low investment>low productivity>low income

Introduction To Concern National income is a part of macro economics Macroeconomics is the study of economy as a whole. The study of economy as a whole is carried out by analyzing the behaviour of & interaction between macroeconomics variables including national output (GDP & GNP),aggregate employment,the general price level,aggregate consumption,savings & investment,price level & economic transactions with the rest of the world.

Objectives Of The Study To become aware about the methods of calculating national income. To become aware about national income concept as a whole. To know the national income of our country. To know the growth rate of our country. To become aware about the history of national income.

Data Accumulated History of National income concept In 1876 , Dadabhai Naroji was the first person to prepare estimates of national income & per capital income for the year 1867-68. Calculation of per capital income Per capital income = National income of year 2009 divided by Population of 2009.

Estimates of national income & per capital income before independence

Estimated by Yr.Of Estimate Natitonal Income(Rs Crore) Per Capital Income(Rs)

Dadabhai naroji 1867-68 Wadia & joshi 1913-14 Shah & khambata 1921-22 V.K.R.V. Rao 1931-32 Ministry of commerce 1945-46 (govt.of india)

340 1067 2364 1689 6234

20 44 74 62 198

Comparison of per capital income with other countries

Country Per Capital Income(us dollars)year 2006 Usa 44970 Uk 40180 Japan 38410 China 2010 Srilanka 1300 India 820 Pakistan 770 (Source:world development report,2007)

Methods of Measuring National Income

Product or Value Added Method or Net Output Method Income Method Expenditure Method & Commodity Flow Method

Importance Of Measure National Income

o o o o

It helps us to estimate the level of economic development of nation. It is used in computing per capital income. It is used for analysing various phases of business cycles. It is used for framing various policies by the government. It helps in comparing economic growth of our country with other nations.

Difficulties In Measuring National Income In India Non monetised sector Lack of distinct differentiation of economic activities Black money Inter regional differences Conceptual problems Mass illiteracy Non availability of data about certain incomes Difficulties of sampling technique Lack of skilled personnel to collect data & prepare estimates

What National Income Does Not Measure? Income from illegal activities like Smuggling,Gambling etc Income from non economic activities like domestic work by Housewives,work done without remuneration. Black Moneyi.e.income which is not reported to income tax authorities, and on which income tax is not paid.

Measures Of National Income

GNP (Gross national product) GNP is defined value of all final goods & services produced in one year but plus income earned abroad by the nationals & minus income earned locally by foreigners. GDP (Gross domestic product) In case of GDP,minus income earned abroad by the nationals & plus income earned locally by foreigners from the total value of domestically produced goods & services. NNP (Net National Product) The NNP gives the measure of net output available for consumption by the society (including consumers,producers & the government).NNP is the real measure of the national income.NNP=NNI(Net National Income) NDP (Net Domestic Product) NDP = NNP less net income from abroad

Plans percentage growth of national income First plan(1951-56) 3.6 Second plan 4.1 Third plan 2.5 Fourth plan 3.3 Fifth plan 5.0 Sixth plan 5.4 Seventh plan 5.8 Eight plan 6.7 Ninth plan 5.5 Tenth plan 7.8 Eleventh plan (target)(2007-2012) 9.0

Percentage rate of growth of national income at constant prices

Growth Rate Of GDP Of Different Nations (Annual Average In Percentage) Country 1969-70 2005-06 Usa 4.3 2.4 Japan 10.9 2.4 Germany 4.4 2.9 China 5.2 10.1 Srilanka 4.6 6.6 Pakistan 6.7 4.1 India 3.4 7.7 World 5.0 2.8 (source:world development report,2007)

National Income-Industrial Origin Central statistical organisation has divided the economy into three basic sectors: Primary sector (Agriculture,forestry,fishing,mining & Quarrying) Secondary sector (Manufacturing,power generation,gas & water supply) Tertiary sector/service sector (1. Transport,Communication & Trade 2. Banking,Insurance & Computer Software 3.Public Administration,Defence & Other Services 4. External Trade)

Causes Of Low National Income Of India Economic causes Low rate of saving & investment Backward technology Rapid increase in population More dependence on agriculture Inadequate industrial development Inadequate progress of transport & power Unbalanced growth of different regions Social causes (Illiteracy,social institutions,fatalism) Political causes

Conclusions National income of our country is less, comparisons with different nations. our country is under developed economy, on growing stage. Various causes is a hurdle in the success of our country. National income represents the growth & development of economy.

Recommendations Increase in rate of saving & investment Modern technology Development of agriculture Development of industries Development of transport & power More social welfare services Growth of foreign trade Proper Use of natural resources Education Development of banking & insurance Political stability

References Managerials economics by D N Dwivedi Indian economy by T.R. Jain Managerial economics (kalyani publisher) Managerial economics by T.R.Jain