National Income National Income Committee defines national income as "the value of commodities and services produced in an economy

during a given period, counted without duplication." To be more specific, N.I is explained as aggregate money value of all the goods and services produced by a country. The flow of goods and services which become available to people of a nation for consumption purpose during the accounting period, generally one year. Estimates of National Income: Pre-Independence Estimates of National Income: Since there was no official body in India to prepare National Income estimate before Indian Independence, the same was prepared by some eminent personalities in their personal capacity. Dadabhai Naoroji, fondly called the Grand Old Man of India, was the pioneer in this field. He prepared the first estimates of National income in 1876. He estimated the national income by first estimating the value of agricultural production and then adding a certain percentage as nonagricultural production. However, such method can only been called as a non-scientific method. The first person to adopt a scientific procedure in estimating the national income was Dr. VKRV Rao in 1931. He divided the Indian Economy into two parts: Agricultural Sector which included agriculture, forests, fishing and hunting.

Corporate Sector which included industries, construction, business, transport and public services. Two different methods were used for estimating the income in the two sectors. Product method was used for estimating income in agricultural sector and income method was used for estimating income in the corporate sector. Finally, Net Factor Income earned from abroad was added to the sum of the above two to obtain national income.

Estimates of National Income after Independence The Government of India appointed National Income Committee in 1949. The committee was chaired by Prof. P.C. Mahalanobis and had Prof D.R. Gadgil and Dr. V.K.R.V. Rao as members. The first report of the committee was presented in 1951. According to the first report, the National Income of India for 1948-49 was Rs. 8,710 crore and the per capita income was Rs. 225. Since 1955 the national income estimates are being prepared by Central Statistical Organisation. The Central Statistical Organisation has divided Indian economy into three basic sector for the purpose of evaluation of various data. They are: Primary sector comprising agriculture, forestry, fishing, mining and quarrying.

Secondary sector comprising manufacturing, power generation, gas and water supply and Tertiary sector comprising transport, communication and trade, banking insurance, computer software, public administration, defence and External trade. The CSO uses different methods like the Product Method, Income Method and Expenditure method for various sectors in the process of estimating the National Income. Product Method: In this method, national income is measured as a flow of goods and services. We calculate money value of all final goods and services produced in an economy during a year. Final goods here refer to those goods which are directly consumed and not used in further production process. Income Method: Under this method, national income is measured as a flow of factor incomes. There are generally four factors of production labour, capital, land and entrepreneurship. Labour gets wages and salaries, capital gets interest, land gets rent and entrepreneurship gets profit as their remuneration.

Expenditure Method:

In this method, national income is measured as a flow of expenditure. GDP is sum-total of private consumption expenditure. Government consumption expenditure, gross capital formation (Government and private) and net exports (Export-Import). Products concepts of national income Gross domestic product (GDP): GDP is aggregate money valve of final goods and services produced in domestic territory of the country during an accounting year. According to Prof.Hansen,"By gross domestic product we mean valve of all the goods and services produced in any given period usually in a year in domestic territory. GDP can be calculated by using a formula,
GDP=(C+I+G).

As per the data released by the Central Statistical Organisation Gross Domestic Product: GDP at factor cost at constant (2004-05) prices in the year 2012-13 is now estimated at Rs. 55,05, 437 crore (as against Rs. 55,03,476 crore estimated earlier on 7th February, 2013), showing a growth rate of 5.0 percent over the First Revised Estimates of GDP for the year 2011-12 of Rs. 52, 43,582 crore, released on 31th January 2013.

Gross National Income: The Gross National Income (GNI) at factor cost at 2004-05 prices is now estimated at Rs. 54,49,104 crore (as compared to Rs. 54,47,169 crore estimated on 7th February 2013), during 2012-13, as against the previous years First Revised Estimate of Rs. 51,96,848 crore. In terms of growth rates, the gross national income is estimated to have risen by 4.9 percent during 2012-13, in comparison to the growth rate of 6.4 percent in 2011-12.