Question

Which method followed by india for measuring national income?

Answer 1

he following are the three methods to calculate National Income.

1.Value added method:

According to this method, national income is estimated by aggregating the value added by each of the producing units in the economy. The aggregate of the value added by all the units gives an estimate of Gross Domestic product at market prices.

2.Income method:

According to this method, national income is estimated by aggregating the factor income paid to all the owners of factors of production within the domestic territory. This aggregate of the factor incomes gives an estimate of Net Domestic product at factor prices.

3.Expenditure method:


According to this method, national income is measured in terms of total expenditure on final goods and services produced in an economy during an accounting year. This aggregate of expenditure incurred on the domestically produced goods and services gives an estimate of Gross Domestic product at market prices. A detailed explanation of all the three methods along with the videos has been extensively covered in our study material. You can refer to the same following the below mentioned path.