What Is National Income? Concept, Definition, Measurement And All ...

Có thể bạn quan tâm

Quick Links

School & Boards
College Admission
Govt Jobs Alert & Prep
Current Affairs
GK & Aptitude

Home
general knowledge
Current GK

Comments

All Comments (0)

Join the conversation

Well written content 👍
Worth the read
Captivating and insightful
Brilliantly explained 😎

What is National Income? Concept, definition, measurement and all you need to knowBy Jagran Josh Jul 6, 2021, 11:40 IST

National Income is an interesting and important topic from Indian Economy which is almost every year asked in various competitive exams. Take a look at the definition of National Income, its measurement and the factor sit depends on in the article below.

Add as a preferred source on Google Join us

What is National Income?

National Income of any country means the complete value of the goods and services produced by any country during its financial year. It is thus the consequence of all economic activities that are running in any country during the period of one year. It is valued in terms of money. In short one can say that the national income of any country is the total amount of income that is accrued by it through various economic activities in one year. It is also helpful in determining the progress of the country.

It includes wages, interest, rent, profit, received by factors of production like labour, capital, land and entrepreneurship of a nation.

National Income: Concept

There are various concepts of National Income including GDP, GNP, NNP, NI, PI, DI, and PCI which explain the facts of economic activities.

RELATED| List of Government Banks in India in 2021

a. GDP at market price: Is money value of all goods and services produced within the domestic domain with the available resources during a year.

GDP = (P*Q)

Where,

GDP = gross domestic product

P = Price of goods and services

Q= Quantity of goods and services

GDP is made up of 4 Components

consumption
investment
government expenditure
net foreign exports of a country

GDP = C+I+G+(X-M) Where, C=ConsumptionI=InvestmentG=Government expenditure(X-M) =Export minus import

b. Gross National Product (GNP): Is market value of final goods and services produced in a year by the residents of the country within the domestic territory as well as abroad. GNP is the value of goods and services that the country's citizens produce regardless of their location.

GNP=GDP+NFIA or,

GNP=C+I+G+(X-M) +NFIA

Where, C=ConsumptionI=InvestmentG=Government expenditure(X-M) =Export minus import

NFIA= Net factor income from abroad.

c. Net National Product (NNP) at MP: Is market value of net output of final goods and services produced by an economy during a year and net factor income from abroad. NNP=GNP-Depreciationor, NNP=C+I+G+(X-M) +NFIA- IT-Depreciation

Where, C=ConsumptionI=InvestmentG=Government expenditure(X-M) =Export minus import

NFIA= Net factor income from abroad.

IT= Indirect Taxes

d. National Income (NI): Is also known as National Income at factor cost which means total income earned by resources for their contribution of land, labour, capital and organisational ability. Hence, the sum of the income received by factors of production in the form of rent, wages, interest and profit is called National Income.

Symbolically or as per the formula NI=NNP +Subsidies-Interest Taxesor, GNP-Depreciation +Subsidies-Indirect Taxesor, NI=C+G+I+(X-M) +NFIA-Depreciation-Indirect Taxes +Subsidies

e. Personal Income (PI): Is the total money income received by individuals and households of a country from all possible sources before direct taxes. Therefore, personal income can be expressed as follows: PI=NI-Corporate Income Taxes-Undistributed Corporate Profits- Social Security Contribution +Transfer Payments.

f. Disposable Income (DI) : It is the income left with the individuals after the payment of direct taxes from personal income. It is the actual income left for disposal or that can be spent for consumption by individuals.

Thus, it can be expressed as:

DI=PI-Direct Taxes

g. Per Capita Income (PCI): It is calculated by dividing the national income of the country by the total population of a country.

Thus, PCI=Total National Income/Total National Population

Also Read| Why is stock market important for any country?

Measurement of National Income

There are three methods to calculate National Income:

Income Method
Product/ Value Added Method
Expenditure Method

Income Method

In this National Income is measured as flow of income.

We can calculate NI as:

Net National Income = Compensation of Employees+ Operating surplus mixed (w +R +P +I) + Net income + Net factor income from abroad.

Where,

W = Wages and salaries

R = Rental Income

P = Profit

I = Mixed Income

Product/ Value Added Method

In this National Income is measured as flow of goods and services.

We can calculate NI as:

NATIONAL INCOME = G.N.P – COST OF CAPITAL – DEPRECIATION – INDIRECT TAXES

Expenditure Method

In this National Income is measured as flow of expenditure.

We can calculate NI through Expenditure method as:

National Income=National Product=National Expenditure.

So, above were the concepts of National Income explained in detail. The students of various exams like UPSC, SSC and Bank PO must go through these concepts to excel in their exams.

Also Read| What is the difference between Non Resident Indian (NRI) and Person of Indian Origin (PIO)?

Jagran Josh

Education Desk

Your career begins here! At Jagranjosh.com, our vision is to enable the youth to make informed life decisions, and our mission is to create credible and actionable content that answers questions or solves problems for India’s share of Next Billion Users. As India’s leading education and career guidance platform, we connect the dots for students, guiding them through every step of their journey—from excelling in school exams, board exams, and entrance tests to securing competitive jobs and building essential skills for their profession. With our deep expertise in exams and education, along with accurate information, expert insights, and interactive tools, we bridge the gap between education and opportunity, empowering students to confidently achieve their goals.

On this Day, July 6: What happened Today?

List of NFL Teams: Check Here the Division and Interesting Facts About NFL
Current GK
What is the Capital of Bhutan? Check Its History Here!
Current GK
Which is Known as the World's First Republic?
GK for Exams

FAQs

What is income method in National Income?+The Income Method can measure national income from the side of payments made to the primary factors of production in the form of rent, wages, interest and profit for their productive services in an accounting year.
How many major classes of National Income are there?+There are 5 major classes of National Income
Is national income the same as GDP? +No National Income is the total value of all services and goods that are produced within a country while Gross Domestic Product is defined as the value of the goods and services generated within a country.
What is the formula of National Income?+The formula of National Income is: NI = C (household consumption) + G (government expenditure) + I (investment expense) + NX (net exports).

Get here current GK and GK quiz questions in English and Hindi for India, World, Sports and Competitive exam preparation. Download the Jagran Josh Current Affairs App.

Latest Education News

List of NFL Teams: Check Here the Division and Interesting Facts About NFL
just now
GATE Admit Card 2026 LIVE: IIT GUWAHATI Engineering Exam Hall Ticket Expected Today at gate2026.iitg.ac.in; Direct link here
just now
MP Police SI Admit Card 2026 LIVE: जल्द जारी होगा सब इंस्पेक्टर एडमिट कार्ड, esb.mp.gov.in से डाउनलोड कर सकेंगे हॉल टिकट
just now
XAT 2026 Answer Key: Provisional Answer Key Out Soon at xatonline.in; Check Expected Date & Time
just now
Top 50 CBSE Class 10 Hindi A MCQs with Answers for High Score in Pre Board Exam 2026
just now
BSEB Bihar Sakshamta Pariksha 2026: 5वें चरण के लिए रजिस्ट्रेशन की अंतिम तिथि, तुरंत करें अप्लाई
just now
What is the Capital of Indiana?
16 mins ago
Which Subject Is Known as the Mother of All Sciences?
20 mins ago
Vishwa Hindi Diwas 2026: UN में हिंदी में भाषण देने वाले पहले भारतीय नेता कौन थे? जिन्होंने वैश्विक पटल पर बढ़ाया हिंदी का महत्व
25 mins ago
School Holiday on 9th January 2026 (Friday): Schools Closed Today in THESE States Due to Cold Wave; Details Here
26 mins ago
World Hindi Diwas 2026: भाषण, और इस साल की विशेष थीम "हिंदी: यहाँ पढ़ें
28 mins ago
APPSC Exam Date 2026 OUT: Exam Scheduled for Jan 27th - 31th, Admit Card Releasing on this date at psc.ap.gov.in
27 mins ago
MP Police SI Admit Card 2026 Releasing Soon at esb.mp.gov.in; Check Expected Date and Exam Hall Ticket Download Link Here
29 mins ago
Entrepreneurship vs. Intrapreneurship: Which Career Path Should You Choose?
27 mins ago
SNAP Result 2025 LIVE: [Link Active] Symbiosis Scorecard OUT at snaptest.org; Check Percentile, Marks and Score Details Here
29 mins ago
ISC Business Studies Specimen Paper 2026 Class 12: CISCE Business Studies Sample Paper, Download PDF
28 mins ago
HPBOSE SOS स्पेशल इम्प्रूवमेंट रिजल्ट 2025 आउट: 10वीं-12वीं का रिजल्ट जारी, hpbose.org से करें चेक
28 mins ago
Rajasthan Forest Guard Vacancy 2026: वनपाल के 259 पदों पर नोटिफिकेशन जारी, इच्छुक उम्मीदवार करें आवेदन
29 mins ago
Essay on Swami Vivekananda in Hindi
28 mins ago
Which Academic Discipline is Known as the Mother Discipline?
28 mins ago

Từ khóa » Gnp=c+i+g+(x-m)

What Is National Income? Concept, Definition, Measurement And All ...

Comments

All Comments (0)

Join the conversation

National Income is an interesting and important topic from Indian Economy which is almost every year asked in various competitive exams. Take a look at the definition of National Income, its measurement and the factor sit depends on in the article below.