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National income
 

National income

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    National income National income Presentation Transcript

    • NATIONAL INCOME MADE BY:ASHUTOSH
    • MESURING NATIONAL INCOME METHODS VALUE ADDED INCOME EXPENDITURE
    • MEANING OF NATIONAL INCOME
      • FROM INCOME POINT OF VIEW
      • “National income is the sum of factor incomes earned by normal residents of a country within and outside the country in the form of rent, wages, interest and profit in an accounting year.”
      • (factor incomes for factors of production)
    • CONCEPT
      • DEPRICIATION : Dep. is used to differentiate between GROSS and NET.
      • (GROSS = NET + DEPRICIATION)
      • NET INDIRECT TAX : NIT is used to differentiate between MARKET PRICE and FACTOR PRICE.
      • (MKT. PRICE = FAC. PRICE + NIT)
    • Cont……
      • NET FACTOR INCOME FROM ABROAD : NIFA is used to differentiate between NATIONAL INCOME and DOMESTIC INCOME.
      • (NATIONAL = DOMESTIC + NIFA)
    • EXAMPLES
      • 1. GDP to GNP :
      • GNP = GDP + NIFA
      • 2. GDP at MP to GNP at FC :
      • GNP at FC = GDP +NIFA – NIT
      • 3. GDP to NDP :
      • GDP = NDP + DEPRICIATION
    • Domestic income and its Components COMPONENTS Compensation of employees Operating surplus Mixed income of Self employed
    • COMPENSATION OF EMPLOYEES
      • WAGES :This is a reward or compensation paid to employees for rendering services. It includes :
      • 1.Wages and salaries in cash or kind.
      • 2.Empolyer’s contribution to SSC schemes.
    • OPERATING SURPLUS
      • OPERATING SURPLUS
      Income from property Income from Entrepreneurship
    • Parts of Income from Property
      • There are two parts :-
      • 1. Rent
      • 2. Interest
    • Parts of Income from Entrepreneurship
      • PROFIT
      Corporate tax Dividend Undistributed profit
    • Mixed Income of Self-Employed
      • Income of own account workers (like farmers , doctors ,barbers) and unincorporated enterprise (like small shopkeepers , retail traders etc.).
      • They do not make proper accounts .
      • They do not hire factor services from market rather they have their own.
      • In India they are known as unorganized sectors so, their income is clubbed under mixed income head.
    • Steps Involved
      • Identify enterprises which employ factors of production.
      • Classify various types of factor income under three main heads.
      • Estimate amount of factor payments made by each enterprise.
      • Sum up all factor payments made within domestic territory to get NDP at FC .
      • Estimate NIFA to derive NATIONAL INCOM
    • Precautions
      • All transfer incomes are not included.
      • Sale and purchase of second hand goods are excluded because they are not part of production of this year’s.
      • Imputed rent of owner is included (assumed).
      • Incomes from illegal activities like betting, smuggling ,black marketing are excluded.