2. NATIONAL INCOME ESTIMATES
IN INDIA
Dadabhai Naoroji prepared the first estimates of National income
in 1876. He estimated the national income by first estimating the
value of agricultural production and then adding a certain
percentage as non-agricultural production.
3. NATIONAL INCOME ESTIMATES
IN INDIA
Findlay Shirras (1911, 1922 and 1934), Shah and Khambatta (1921),
V.K.R.V. Rao (1931) and R.C. Desai (1931-40)
The first person to adopt a scientific procedure in estimating the
national income was Dr. VKRV Rao in 1931.
4. NATIONAL INCOME
ESTIMATES IN INDIA
The Government of India appointed National Income
Committee in 1949. The committee was chaired by
Prof. P.C. Mahalanobis and had Prof D.R. Gadgil and
Dr. V.K.R.V. Rao as members . The first report of the
committee was presented in 1951. According to the
first report, the National Income of India for 1948-49
was Rs. 8,710 crore and the per capita income was Rs.
225.
5. NATIONAL INCOME ESTIMATES IN
INDIA
Since 1955 the national income estimates are being
prepared by Central Statistical Organisation.
6. DOMESTIC TERRITORY
Domestic territory includes
all those areas from where
an economy receives its
domestic income.
It includes the following
political boundary that is
The land and water
boundaries of a country
7. DOMESTIC TERRITORY
Ships and Air crafts
operated by the residents
of a country between any
two countries (Air space or
water territory)
8. DOMESTIC TERRITORY
Fishing Vessels and
floating oil platforms/
extraction centres operated
by the residents of a
country in international
waters.
14. NORMAL RESIDENT
Any firm or person living in a country for one year or
more.
His/ its economic interest lies in that country. It means
it/he conducts his economic transactions in that
country on a significant scale
15. NORMAL RESIDENT
A Clarification:
Students remain resident of that country of which they
are citizen.
The person who cross the borders daily in search of
work are the resident of that country of which they are
citizen.
Persons working in international organisations like
UNICEF, World Bank, WHO, UNO,IMF etc are the
resident of that country of which they are citizen.
19. Meaning/ Definition of Goods:
Commodities which have
physical existence and means
to satisfy human needs are
called goods.
All tangible commodities use
to satisfy human wants called
goods.
20. Meaning of Services:
Commodities which do not have a
physical existence but means to
satisfy human needs are called
services.
i.e. Transportation, Banking, Tourism
services etc.
They are non tangible.
21. Types of Goods Produced in an Economy
Types of Goods
Final
Goods
Intermediate
goods
FINAL PRODUCER
/ CAPITAL GOODS
CONSUMER
GOODS
22. INTERMEDIATE GOODS
The goods which are used as raw material by the producers are
called intermediate goods.
These are the single use / non durable goods.
The value is added into these goods during the process of
production and they are resold in the market.
They remain inside the production boundary.
23. Final Goods
Final Goods in which no further value is added.
They are not resold in the market.
These goods have crossed the boundary line of production and
now ready for being used by consumers and producers.
Final consumers includes both Consumers and producers.
Final Goods generally categorized in “Final Consumer Goods” and
“Final Producer Goods/ Capital goods”
24.
25. FINAL GOODS
Final goods are of two types:
1. Consumer goods
2. Capital goods/ Final Producer goods
26. Consumer Goods
Consumer Goods are the final goods which are used by consumers
to for satisfying their wants.
Expenditure Occurred by consumers on final goods is known as
“Consumption Expenditure”
27. Final Producer Goods/Capital
Goods Capital goods are those durable goods with the help of which
other goods are produced.
Final Producer Goods are purchased by producers for generally
used as fixed capital/ Investment.
Expenditure Occurred by producers on final goods is known as
“Investment Expenditure/ Capital Formation”
29. Same good may be consumer or
intermediate good.
Same good may be final good or intermediate good
its depends upon its end use.
Bread used at homes
Bread used at Chaggan Halwai shop for making
bread pakora.
30. Same good may be consumer or
intermediate good
Same good may be final good or intermediate good its
depends upon its end use:
Flour used at homes for making roti.
Flour used at Raju ka Dhaba for making roti.
31. Same good may be consumer or
capital good
Same good may be consumer good or capital good its depends
upon its end use:
Refrigerator used at homes .
Refrigerator used at Kohli Refreshment for keeping cold drinks.
32. Same good may be consumer or
capital good
Same good may be consumer good or capital good its depends
upon its end use:
Furniture used at homes.
Furniture used at Ajosys Technologies, a software development firm,
for its office.
33. Difference between final goods or
intermediate goods
Intermediate goods
1. Those non durable goods which
are used as raw material for the
production of other goods are
called intermediate goods.
2. Value addition is yet to be done in
these goods.
3. Expenditure spend on these items
called intermediate consumption or
intermediate cost.
Final goods
1. Those goods which are meant for
final consumption by consumer or
producers.
2. No further value addition is to be
done in these goods.
3. Expenditure spend on these items
called final expenditure (C+I) ie
final consumption expenditure or
investment expenditure/ capital
formation.
34. Difference between final goods or
intermediate goods
Intermediate goods
3. These items are not
included in the estimate of
national income.
4. These items remain within
the production line and are
not ready for use as raw
material.
Final Goods
3. These items are included in
the estimate of national
Income.
4. These items remain outside
the production line and are
ready for final
consumption/ investment.
35. Difference between final goods or
intermediate goods
Intermediate goods
5. During the accounting
year, these items are
resold by the firms to
make profit.
Final Goods
5. During the accounting year,
these items are not resold
by the firms but are ready
for final consumers.
36. End Use Classification of
Goods
According to end use of goods, they may be classifies
in three:
1. Intermediate goods
2. Consumer goods
3. Capital Goods
37. I. Intermediate Goods
Those non durable goods which are transformed into other goods
during the production process.
These goods are resold in the market after adding value into them.
They are generally used as raw material for the production of other
goods.
38. II. Consumer goods
Consumer goods are things that directly satisfy human needs.
No value is added to them, hence they are resold.
Example- milk or ice-cream used by a family/ household.
39. Types of Consumer goods
1. Durable Goods-
Durable goods are those items that can be used for
several years and also have a higher relative value.
These items are used repeatedly till the end.
Example- T.V., Car, Washing machine, etc.
40. Types of Consumer goods
2. Semi- durable Goods-
Semi-durable consumer goods are items that can be
used for a year or more.
These items are not of much value.
Example- Clothes, furniture, electric items.
41. Types of Consumer goods
3. Non-durable or single-use
consumer goods-
Non-durable or single-use consumer goods are items
that can only be used once.
Example- milk, petrol, etc.
42. Types of Consumer goods
4. Services-
Services are non-physical goods that directly satisfy
human needs.
Examples: Transportation services, banking services,
insurance services, communication services.
43. III. Capital Goods
Capital goods those durable goods which help in the production of
other goods. These are final goods and are used fixed assets by
producers.
Expenditure on final goods is called investment or capital formation
Capital goods are generally of high value.
