In this article we will discuss about the difficulties for measuring India’s National income. National income is the net value of all goods and services (national product) produced annually in a country. It can be measured in three ways: (i) Firstly, it can be taken as the domestic product/output of goods and services produced by enterprise within the country. This [...]
The following points highlight the four major problems in measuring national income of a developing country. The problems are: 1. Lack of Reliable Data 2. Existence of Non-Monetised Sector 3. Difficulties in the Classification of Working Population 4. Defective Methods Used for Deflating Domestic Product Series. Problem # 1. Lack of Reliable Data: The reliability of data relating to national [...]
The following points highlight the three methods for measuring national income. The methods are: 1. The Product (Output) Method 2. The Income Method 3. The Expenditure Method. 1. The Product (Output) Method: The most direct method of arriving at an estimate of a country's national output or income is to add the output figures of all firms in the economy [...]