1. National income is defined as the total market value of final goods and services produced in an economy in a given period of time. It measures the size of the economy and economic performance. 2. National income needs to be studied to trace economic growth trends, understand the structure of the economy, formulate development plans and policies, and make international comparisons. 3. National income aggregates are measured at current prices and constant prices to allow for inflationary comparisons over time.

1. Presentation On National Income
Presented By – Shivam Agarwal
USN – 201410702110018
BBA-31

2. National income or national product is defined as the total market value of all the
final goods and services produced in an economy in a given period of time. This
suggests that the labour and capital of a country, working on the natural resources
produces certain net amount of goods and services, the aggregates of which as known
as national income or national products.
National Income

3. Needs for the study of National Income :
1. To measure the size of the economy and level of country’s economic
performance.
2. To trace the trend or speed of the economic growth in relation to
previous year(s) as well as to other countries.
3. To know the structure and composition of the national income in terms
of various sectors and the periodical variations in them.
4. To make projection about the future development trend of the
economy.

4. 5. To help Govt. to formulate suitable development plans and policies to
increase growth rates.
6. To fix various development targets for different sectors of economy on
the basis of there performance.
7. To help business firms in forecasting future demand for there products
8. To make international comparison of people’s living standards.

5. NATIONAL INCOME AGGREGATES
 National Income at Current Price
Current Prices refer to the prices prevailing in the market during the year for which
estimates are made.
 National Income at Constant Price
Constant Prices refer to the prices prevailing in the market in the base year. National
income is measured at both the levels in order to enable a comparison

6. This refers to an individual's share of the national
income. It is calculated to understand the economic
growth and development of a country.
 India has one of the largest economies in the world
in terms of its gross domestic product (GDP).
 However, India has such a large population that we
have has an extremely low per capita GDP.
PER CAPITA INCOME

7. MARKET PRICE V/S FACTOR COST
A commodity when goes to the market, indirect taxes are
imposed on it. This is the market price. When we deduct the
net indirect taxes we get factor cost.

8. CIRCULAR FLOW OF INCOME

9.  Measures inflationary or deflationary pressure.
 Contribution of various sectors.
 Distribution of national income in an economy.
 Shapes the Budgetary policy of the Government.
 Planning of an Economy.
IMPORTANCE OF NATIONAL INCOME

10. Thank You