A CASE STUDY ON NATIONAL INCOME OF INDIA

Prsented by: Robin Varghese Section : C

Summary of the case

Growth of Indian economy: 1975-76: 9.5% Growth 1988-89: 11% Growth 2005-06: 9.0% Growth 2006-07: 9.6% Growth 2007-08: 6.7% Growth 2010 : 8.9% Growth

National Income

The value of goods and services produced With in the country during a year

Prparation of National Income in India

Category A: Agriculture, forestry, fishing, mining

and quarrying, registred manufacturing and construction. CategoryB: Electricity, transportation and communication, banking and insurance, real estate, pablic administration and defence. Category C: gas and water supply, unorganised transport, storage, trade, hotels and restaurants, other services.

QUESTION AND ANSWERS

Significant of preparing national income at constant price

Current price: price prevailing in the year. Constant price: price prevailing at a particular base year. NI at constant price is prepared to measure the physical output in an economy, between deferent time periods Deflator: ratio of nominal GDP to real GDP

No method of national income is perfect prove.

Limitations of deferent methods
1) 2) 3) Product method Double counting Non applicability in service sector Exclusion of non-marketed products Income method Exclusion of non monitory income Exclusion of non marketed services Expenditure method Neglects barter system Ignore own consumption Affected by inflation

Put the values in the equation on the data given in statement 2

NNP = GNP Depreciation
2004-05: 2833558 332491 = 2501067 2005- 06: 3225963 379201 = 2846762

2006-07: 3722669 426030 = 3296639

GNP
GNP = GDP + Net income from Abroad 2004-05: 2855933 + (-22375) = 2833558 2005-06: 3250932 + (-24969) = 3225963 2006-07: 3743472 + (-20803) = 3722669

Per capita income

PCI= NNPFC / Population
2004-05: 2,50,10,670 1,090 = 22,946 2005-06: 2,84,67,620 1,107 = 25,716

2006-07: 3,29,66,390 1,122 = 29,382