Concepts of national income

1. NATIONAL INCOME Presented by Mudassarnajar Inamdar Section B

2. Meaning of National Income National income is the sum total of wages, rent, interest, and profit earned by the factors of production of a country in a year. Thus it is the aggregate values of goods and services rendered during a given period counted without duplication . 04-12-2013 2 Concepts of National Income The current NI of india is 48,77,842 crores (as per census 2011)

3. Important Concepts of National Income Gross Domestic Product Gross National Product Net Domestic Product Net National Product Personal Income Disposable Income 04-12-2013 3 Concepts of National Income

4. Gross Domestic Product GDP is the value of goods and services produced within a country in a given period of time. GDP per capita is often considered an indicator of a country's  standard of living. GDP for the year 2012-13 is 1.824 trillion (i.e. 182.4 thousand cores) GDP growth at 6.1 – 6.7 percent in 2012-2013 04-12-2013 4 Concepts of National Income

5. Sector wise Contribution for the FY 2013 04-12-2013 5 Concepts of National Income

6. Gross National Product It is the value of all the products and services produced in one year by labour and property supplied by the residents of a country. Unlike Gross Domestic Product (GDP), which defines production based on the geographical location of production. GNP allocates production based on ownership. 04-12-2013 6 Concepts of National Income

7. Net Domestic Product It represents the net book value of all goods and services produced within a nation's geographic borders over a specified period of time. NDP = Gross domestic product (GDP) - Depreciation 04-12-2013 7 Concepts of National Income

8. Net National Product It is the market value of a nation's goods and services minus depreciation. Depreciation measures the amount of GNP that must be spent on new capital goods to maintain the existing physical capital stock NNP = Gross National Product – Depreciation 04-12-2013 8 Concepts of National Income

9. Personal Income Personal Income is the total income received by the individuals of country from all sources before direct taxes. Personal income is not the same as National Income, because it includes ‘ Transfer payments’ Personal income also includes: Wages Salaries Interest and rent received by the individuals. Personal Income = Private Income - Saving of Private enterprise – Corporate tax 04-12-2013 9 Concepts of National Income

10. Disposable Income It is the actual income which can be spent on consumption by individuals and families. It refers to the purchasing power of the house hold. The whole of disposable income is not spent on consumptions; a part of it is paid in the form of direct tax. 04-12-2013 10 Concepts of National Income

11. Conclusion National income of India is influenced by its concepts viz. GDP, GNP, NDP and NNP. Indian economy is growing faster because of faster growth in its national income. Thus, all the above factors play a very vital role in development of any Economy. 04-12-2013 11 Concepts of National Income

12. Any queries?? 04-12-2013 12 Concepts of National Income

13. Thank you 04-12-2013 13 Concepts of National Income