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Growth Trends in National Income of India

National income is defined as the total value of all goods and services produced in a country in a year. It is used to measure a country's economic progress over time and compare the economic positions of different countries. There are several methods used to calculate national income, including production, income, and expenditure methods. The first attempts to calculate India's national income were made in the 1860s, with more scientific studies following in the 1930s and 1940s. However, calculating national income for India remains difficult due to limitations in reliable current economic data and underreporting of values. Constraints like health issues, unemployment, slow agricultural growth, and poverty threaten India's ability to achieve high national income growth in the coming decade.

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725 views1 page

Growth Trends in National Income of India

National income is defined as the total value of all goods and services produced in a country in a year. It is used to measure a country's economic progress over time and compare the economic positions of different countries. There are several methods used to calculate national income, including production, income, and expenditure methods. The first attempts to calculate India's national income were made in the 1860s, with more scientific studies following in the 1930s and 1940s. However, calculating national income for India remains difficult due to limitations in reliable current economic data and underreporting of values. Constraints like health issues, unemployment, slow agricultural growth, and poverty threaten India's ability to achieve high national income growth in the coming decade.

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shikha_rai_2
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© Attribution Non-Commercial (BY-NC)
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According to the famous economist J.M.

Keynes national income is the money value of all the goods and
services produced in a country during a year. The National income of any country shows the economic
position of the country. It is the national income which helps to compare the progress of the country over a
period of time. The study of National income is important because of the following reasons:

* To see the economic development of the country.


* To assess the developmental objectives.
* To know the contribution of the various sectors to National income.

There are various methods for calculating the national income such as production method, income method,
expenditure method etc.

Calculation of National Income of India: A Brief History


The first attempt to calculate National Income of India was made by Dadabhai Naroji in 1867 -68. This was
followed by several other methods. The first scientific method was made by Prof. V.K.R Rao in 1931-32. But
this was not very satisfactory. The first official attempt was made by Prof.P.C.Mahalnobis in 1948-49, who
submitted his report in 1954.

Difficulties in Calculation of National Income


In India people who are calculating the national incomes have shown the various difficulties in calculating
the national income. The most severe one is the finding of reliable data. Most of the time, it is based on
assumptions. Soon after independence the National Income Committee was formed to collect data and
estimate national income. The two major problems which remain in the calculation of National Income are:

* Most of the data is not from the current year.


* Even if current data are available then values are underreported.

Obstacles in High Growth of National Income of India


It is also estimated that in the next 10 years India's national income is going to suffer because of diseases.
Various diseases such as stroke, diabetes are going to cost India a loss of nearly $200billion. The
government of India must try to frame suitable strategies for evolving greater generation of goods.
Unemployment which is a big problem of the Indian economy must be solved. Only when people will be
employed they will be able to earn contribute in the national income.

The other major factors which are going to hurt the National Income of India are: Slow growth of
agricultural sector, defect in planning, poverty etc.
A higher national income will result in a prosperous economy.

http://www.scribd.com/doc/26474828/Trends-of-National-Income-in-India

http://www.economywatch.com/indianeconomy/indian-economy-overview.html

http://tutor2u.net/economics/revision-notes/a2-macro-national-income-living-standards.html

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