There are three main methods to calculate National Income: 1. Value added method which sums the Gross Value Added at market prices (GVAmp) of all firms to get Gross Domestic Product at market prices (GDPmp), then makes adjustments. 2. Income method which sums compensation of employees, operating surplus, and mixed income to get Net Domestic Product at factor cost (NDPfc) and then adds net factor income from abroad. 3. Expenditure method which expresses GDPmp as the sum of final consumption (C), investment (I), government spending (G), and net exports (exports (X) minus imports (M)), and then makes similar adjustments to get Net National Product at factor

1. National Income Measurement and its Method
Navratan Sharma SMPS
Three methods of calculatingNational Income
1.Value added methodGVAmp
(Sales+∆Stock)-IntermediariesGoods
NVAfc=GVAmp-D-NIT
GVAfc=GVAmp-NIT
GDPmp issum of GVAmpof all firms.
National Income means:NNPfc=GDPmp-D+NFIA-NIT
G=stands for gross means includingdepreciationsoG converts in to N
D=stands for domesticmeansexcludingNFIA(International trade) so whenNFIA is addedto Domestic
it become national D converts into N
Fc=stands for factor cost means withoutindirect tax if Indirecttax includesit become market price so
FC converts intoMP
2.Income Metod
Sum up COE+OS+MI denotesNDPfc
NDPfc+NFIA=NNPfc
3.Expenditure Method
GDPmp=C+I+G+(X-M)
NNPfc=GDPmp-D+NFIA-NIT
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