National Income in of India in 2010-11

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MACRO-ECONOMICS ASSIGNMENT TOPIC: NATIONAL INCOME ACCOUNTING IN INDIA WITH REFERENCE TO THE YEAR 2010-2011 What is NATIONAL INCOME? The concept of National Income is worth elaborating as it is the index of economic development. Innumerable varieties of goods are produced in an economy in a year. These goods or output are expressed in monetary terms. The aggregate of monetary values of all verities of goods produced in a country during a given period, usually a year is called National product. For the production of innumerable varieties of output, four factors of production have their respective contribution for which they are paid in terms of * rent, * wage, * interest and * Profit. The sums of their enumerations…show more content…
The expenditure method cannot be used where markets are unorganised. The production method cannot also be used for unorganised sectors such as small-scale industries, trade and transport, and so on. Different methods are used to measure the income genera ted by various sectors of the economy. For calculating national income, the Indian economy is divided into 14 broad sectors, which are then grouped into three main categories : A, B and C. Agriculture, forestry and logging, fishing, mining and quarrying, registered manufacturing and construction are included in category A. The production method is applied to category A. The value added by this category is found by subtracting the value of raw materials and other inputs from the aggregate of commodity-wise output. Electricity, railways, air transport, water and organised transport, communications, banking and insurance, real estate, public administration and defence are included in category B. For category B, the income method is applied and, for this, all the types of factor incomes which are reported in the annual accounts of various organisations are aggregated. In category C, gas and water supply, unorganised roads and water transport, storage, trade, hotels and restaurants, ownership of dwelling and other services are included. For this category, sample surveys are done periodically to find out the average productivity of labour. Estimates of the workforce are interpolated or extrapolated and
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