Transcript ppt on national income by S

By S Khan
PGT ( Economics)
K V Aligarh
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Steps:1- Estiumation of Value of out put:Value of out put = Sales + change in stock.
2-Estimatimg the value of intermediate
consumptionvalue of intermediate consumption=value of
inputs& purchases from other firms
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3- Estimating the value of GDP at MP
GDP mp = Value of output – intermediate
consumption
4- Estimating National income
NI = GDP mp – Depreciation – NIT + NFIA
1- Problem of double counting
2-Non availability of reliable data
3- Difficulty in estimating value of goods
produced but kept for self consumption
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1-Inclusion of imputed rent of self occupied
building.
2-Own account production of capital goods is
included
3-Goods produced purely for self
consumption are not imcluded.
Find national income, GNP mp, GDP fc
Sales of primary sector= Rs 3000, Value of
output in secondary sector = Rs 3500,Change
in stock of primary sector = Rs 400, its
closing stock is Rs 450,change in stock of
secondary sector = Rs 300,Value of services
supplied = Rs 5000,Intermediate
consumption of three sectors = Rs
4500,Depreciation = Rs 50, NIT = Rs 60, Net
Factor Income to Abroad = (-) Rs 100
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Find NI. GNP mp,
Primary sector:-Sales in the country= Rs
2500,Closing stock 200,opening stock=Rs
150,Exports=Rs 600.Intermediate
consumption = Rs 500,imports =Rs 210
Secondary sector:- Sales = 3500, Exports=
Rs 400,Change in stock =Rs 550, Purchase of
raw material from within the country=Rs 250,
Imports = Rs 300.Value of services supplied
= Rs 4500, intermediate consumption of
tertiary sector Rs 1500,Dep = Rs 40, NIT = Rs
30,NFIA = Rs 60
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Steps :1-Estimating COE:COE = Wages and salaries + Contribution
to Social security’s Schemes
2-Estimating OS :OS = Rent + Interest + Royalty + Profit
OS = Rent + Interest + Royalty +
(Dividend + retained earnings of corporate
enterprises + corporate gain tax)
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3- Estimating Mixed income – it is the income
of self employed persons
4- Estimating NDP fc
NDP fc = COE + OS + MI
5-Estimating national income
NI = NDP fc + NFIA
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Non availability of reliable
data
 2- Difficulty created by intercorporate dividend
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1-Imputed rent of self occupied building is
included in national income.
2-Income from wind fall gains like lottery is
not included.
Transfer earnings like scholarship is not
included in national income.
Find National ioncome , GNP mp, NDP mp,and
GDP fc
COE = Rs 5400, contribution to Social scurrility
schemes = Rs 500,Rent and interest = Rs
3000,Dividend = Rs 800, Profit Rs 900,
Corporate gain tax = Rs 30,Mixed income of
self employed persons= Rs 100,Net export =
Rs 40,Factor income to abroad = Rs
60,Depreciation Rs 20,Subsidies = Rs 70.
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Steps:1-Estimating private final consumption
expenditure ( c)
2-Estimating Investment expenditure / Gross
domestic capital formation ( I)
3-Estimating Government final consumption
expenditure ( G)
4-Estimating Net Export ( X – M )
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5-Estimating GDP mp
GDP mp = C + I + G + ( X – M )
6-Estimating national Income
NI = GDP mp + NFIA – NIT - Depreciation
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1-Non availability of reliable data
2-Difficulty in classification of goods into
intermediate and final goods.
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1-Imputed rent of self occupied building is
included in national income.
2-Expenditure on purchasing second hand
goods is not included in national income.
But Income earned in the form of
commission on sale of second hand goods is
included
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Find National income, GNPmp,
Private final consumption expenditure= Rs
4000, Government final consumption
expenditure= Rs 3000,Net fixed capital
formation= Rs 1400, Net Export = Rs 1000,
Closing stock = Rs 400, Opening Stock = Rs
600, Depreciation = Rs 550,Indirect tax = Rs
460,factor income to abroad = Rs 570.
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Find National income by income and
expenditure methods
COE = Rs 2000, Rent and interest = Rs 300,
Operating Surplus = Rs 4500, Mixed income
= Rs = 1000, Private final consumption
expenditure = Rs 2500, Government Final
expenditure = Rs 1400, Net domestic fixed
capital formation= Rs 550 ,Net Export = Rs
600 ,Depreciation = Rs 100, Change in stock
= Rs 150.NFIA = Rs 25, NIT = Rs 45
Thank you very
much
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Topic :- Aggregates relating to National
income.
Prepared By
S Khan
PGT Economics , K V Aligarh
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Income accrued to private individuals and
households from what ever sources in an
accounting year
Private income = N I
- Income from property
and entrepreneurship accruing to Govt
administrative departments – savings of non
departmental enterprises + Current transfers
from Government + Net current transfers
from ROW + National debt interest
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Income actualy received by private individuals
and households from what ever sources in an
accounting year
Personal income = Private income
- Corporate gain tax
- Corporate Savings
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It is the sum of personal consumption
expenditure and personal savings
PDI = Personal Income –diect personal
income tax – insurance premium paid by
employees – miscellaneous receipts of the
government
OR
PDI = C + S
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It is that part of NDP fc which accrues to
private sector only
IDPAPS = NDP fc - - Income from property
and entrepreneurship accruing to Govt
administrative departments – savings of non
departmental enterprises.
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It is the Sum of NI , NIT and Net current
transfers from ROW
NNDI = NI + NIT + Net current Transfers
from ROW.
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It is the Sum of NNDI and Depreciation
GNDI = NNDI + Depreciation.
Sales
+ Change in Stock
Value of Gross Product
-
Intermediate Consumption
GDP mp , GVA mp
- Depreciation
NDP mp , NVA mp
- NIT
NDP fc, NVA fc
+ NFIA
NNP fc, NI
NDP fc
-income of Depart
+ NFIA
- Savings of non
NI
Depart Ent
IDPAPS
- income of department
+ CurrentTrans Govt Enterprises – savings of
+net “
“ ROW
Non Depart. Enterprises
+ NFIA
+Current Trans from Govt
+Natioanal debt int +Net “ “
“
ROW
+ National Debt interest
Private Income
- Corporate Savings
-Corporate Gain Tax
Personal Income
Personal Income
- direct personal income tax
-Insurance premium by Employees
- Misc Receipts of the Govt
PDI
- consumption Expenditure
Personal savings
Find Pvt Income , PI, PDI, IDPAPS, GNDI
NI = Rs 4000, Income from property and
entrepreneurship accruing to Govt administrative
departments= Rs 500, savings of non
departmental enterprises= Rs 400,Income tax = Rs
55, Corporate tax = Rs 30 , Corporate Savings =
Rs 25,Current transfers from Government= 75,
Net current transfers from ROW= Rs
80,Depreciation = Rs 100 , National debt interest=
Rs 85,NIT Rs 20, NFIA = Rs 65
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Find Private income, GNDI ,PDI
Personal Savings= Rs 1200, Private consumption
Exp= Rs 5000, Income from property and
entrepreneurship accruing to Govt
administrative departments= Rs 500, savings of
non departmental enterprises= Rs 400,Income
tax = Rs 55, Corporate tax = Rs 30 , Corporate
Savings = Rs 25,Current transfers from
Government= 75, Net current transfers from
ROW= Rs 80,Depreciation = Rs 100 , National
debt interest= Rs 85,NIT Rs 20, NFIA = Rs 65
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