National Income and GDP Estimation Process
Learn the steps involved in estimating national income and GDP, including the calculation of value of output and intermediate consumption. Explore challenges like double counting and data reliability. Solve practical examples to find national income and GNP.
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Presentation Transcript
By S Khan PGT ( Economics) K V Aligarh
Steps:- 1- Estiumation of Value of out put:- Value of out put = Sales + change in stock. 2-Estimatimg the value of intermediate consumption- value of intermediate consumption=value of inputs& purchases from other firms
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
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
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
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)
3 3- - Estimating Mixed income of self employed persons 4- Estimating NDP fc NDP fc = COE + OS + MI 5-Estimating national income NI = NDP fc + NFIA Estimating Mixed income it is the income
1- Non availability of reliable data 2- Difficulty created by inter- corporate dividend
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.
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 )
5-Estimating GDP mp GDP mp = C + I + G + ( X M ) 6-Estimating national Income NI = GDP mp + NFIA NIT - Depreciation
1-Non availability of reliable data 2-Difficulty in classification of goods into intermediate and final goods.
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
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.
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
Topic :- Aggregates relating to National income. Prepared By S Khan PGT Economics , K V Aligarh
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
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
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
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.
It is the Sum of NI , NIT and Net current transfers from ROW NNDI = NI + NIT + Net current Transfers from ROW.
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 +net ROW Non Depart. Enterprises + NFIA +Current Trans from Govt +Natioanal debt int + National Debt interest Private Income Enterprises savings of +Net ROW - 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
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
