ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS

(NATIONAL INCOME)
 
Normal Residents 



(Normal Residents are “Those persons who ordinarily resides in a a country and whose
economic interests lie in that country”. National income is defined as the value of final goods
and sercices produced by the normal residents of a country).

Domestic Territory:



Stock and Flow variables 
StockFlowStock
Point of
TimeFlow
Period of Time 
StockFlow
హైదరాబాద్
Stock variableFlow
variable
Stock Flow

StockFlow.


Stock variable  Flow vaariable 
   
   
 Savings (Saving) 
   

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ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS

   
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







 



FinalUsers


www.kautilyacareers.com 040-27665101 9515870609
ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS

  

  Net Indirect Taxes = Indirect Taxes-Subsidies.
 


 

 
  

GDP Gap 

GDP
Green GDP  GDP Green
GDP




Normal
Residents

Value of all final goods and services produced by the residents of a country, whether
operating within the domestic territory of the country or outside, in a year.













 

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 


 
National Income Committee (NIC):

  

Central Statistical Organisation (CSO):

Normal
Residents

(Basic Distinctions):


Gross product (Vs) Net product):






Wear and
TearDepreciation)
 Consumption of Fixed capital



  

  = +
  = 
  = 
  = CFC

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
 

 
 
Domestic Vs National Product
 Normal
Residents
 Domestic
Territory






 Normal Residents of a
country





 



NFIA (Net
Factor Income from Abroad).
NFIA(P).
 NFIA=Received Income (R) - Payment Income (P)



  =+ NFIA
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  =NFIA
 NFIA = 
 NFIA = R - P
 NFIA
 NFIA (R > P)
 NFIA (R < P)
 NFIA(R = P)
 Market Prices Versus Factor cost











 


 
 











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 =++
 + 
 =
 = +  
 =
 = 
Norminal Vs Real Incomes



 
 over a period of
time
 


Base
Year


   Price deflator
Deflator is a statistical technique to neutralise the effect of changes in prices
over a period of time



 

 Gross Domestic Product (GDP)
 Gross National Product (GNP)
 Net Domestic Product (NDP)
 Net National Product (NNP)

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 

 GDP  MP

 GNP ) MP

 NDP  MP

 NNP  MP

 GDP ) FC

 GNP  FC

  NDP  FC

  NNP  FC

GDP MP

 

 
 
 
 
GDP 
MP

 GDP
 GDP Value of outputsum
MP

total of value added 

 GDP Capital gains, Financial

MP

Transactions

 GDP X

MP

 
 GDP 
MP

NFIA
 GDP Valve of output in Domestic Territory-Value of Intermediate consomption
MP

GDP =Sum total of Value Added

MP

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 GNP MP

 Normal Residents of a
Country

 GDPNFIAGNP
 
 NFIA

 GDP GDP + NFIA (Net Factor Income from Abroad)
MP MP

 GDP, GNPNFIA

 NFIA 

 NFIA
 
R>P
 GNPGDP

 NFIAR<P)GNP
GDP

GDP, GNP 

GDPMP  GNPMP 
  
 
   Normal Resident of a acountry

  
 
   Broader
   
 GDP=Value of output in Domestic Territory  GNP = GDP + Net Factor Income
Value of international consumption
from abroad

 GDP = GNP - NFIA  GNP = GDP + NFIA

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 NFIA  GDP > GNP  NFIA GNP > GDP

(Payments exceed Receipts P > R)  (Receipts exceed payments

R>P)

NDPMP:

 GDP,
GNP

GDP 
MP



GDPNDP
  NDP  MP
= GNP -D
MP

  NNP  MP
= GDP - Consumption of Fixed Capital
MP

(CFS)

  NNP  MP
= GDP = NFIA-D
MP

NNP 
MP

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
GNNPMP 

 
 NFIA
 NDP =
MP
GNP -D 
MP

  NNP = MP
NDP = NFIA
MP

  NNP = MP
GDP = NFIA-D
MP

NNPGNP

 NNP  MP
GNP  MP

  
  NNP = GNP - D
MP MP
GNP = NNP +D
MP MP

 NDPNNP
 NDP  MP
NNP  MP

 
 

 NFIA  NFIA
 NDP = NNP - NFIA
MP MP
NNP = NDP - NFIA
MP MP



 


 GDP :FC

 
 
 GDP GDP 
MP FC

 GDP GDP 

MP FC

 GDP FC
= GDP - Net Indirect Taxes
MP

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  GDPFC = GDPMP- (Indirect Taxes - Subsidies)

ndirect Taxes - Subsidies

  GDP  FC
= + +++
 

 

GNP 
GDPFC = GDPMP- Net Indirect Taxes

  GDPFC = GDPMP- (Indirect Taxes - Subsidies)

indirect Taxes - Subsidies

  GDP  FC
= + +++
 GNP : FC


 

 GNP  FC
= GNP Net Indirect Taxes
MP

 GNP  FC
= GNP - 
MP

   = GNP - +
MP

 NDP :
FC

 
 NDP  FC
= NDP Net Indirect Taxes 
MP

 NDP FC
= GDP  
FC

 NDP MP
NDP 
FC

  
 NDP NDP +  NDP NDP -
MP FC FC MP

  
 NNP : FC

 NNP 
FC

  NFIA
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 NNPMP NNPFC/

 GNPFCNNPFC

NNPMPNNPFC

Note:NNP NNP 
MP FC


 NNP  FC
= NDP + NFIA
FC

 NNP  FC
= NNP 
MP

 NNP  FC
= GNP D
FC



 
 
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ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS

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www.kautilyacareers.com 040-27665101 9515870609

ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS

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
 

 Private Income

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 Personal Income
 Personal Disposable Income
Private Income:
  


 
Rest of the
World

  NNP Private Income

FC


 
E.g. HMT,
SAIL





 



  Private Income = National Incme - Income from property and
entrepreneuership accruing to the Govt.

   - Savings of non - Departmental enterprises

+ Net current transfers from government

+ Net current transfer from abroad.

  
  Pre - tax Income
Note: 
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  

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


 
Gifts and Donations
  

Personal
  

 

  

 
 Undistrib
uted profits or retained earnings 
  Corporate Profit
Tax

  =
  
Personal Disposable Income

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

Per Capita Income
   
  
PCI=
  
  PCI

   
  = 

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   
   
  =
   
  
   
  = 
   

  
  =
 
  =
 =


 
 

  

  


 


  
 

     
  = X 

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ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS

   
Summary
  
  
  =+NFIA
  NFIA =RP
  
  
  
  NDP - GDP - D

  GNP = GDP + NFIA

NNP = GNP-D

Technically NNP.... is called National Income

 =
 =
   
  +
  +
  =
  =

  = 
  
  
  
 

 

 


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ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS

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 Production-Distribution-Disposition

 

  Net Product Method (or) Value Added Method (
 Income Method
 Expenditure Method ()
 
 Product Method, Value Added Method, Industrial Origin Method, Net Output
Method
 
  


 



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Steel,
Tyres
(Steel, Tyres)Value
AddedStee
l, Tyres
 Gross Value Added = Gross value of output - Intermediate consumption
 Net value Added (NVA) = Gross value Added (GVA) - Depreciation
 NVA FC = NVAMP - Net Indirect Taxes
 NVA FC
NFIANNPFC

 
Gross value of output

(-) Intermediate consumption

Gross Value Added (GVAMP) or GDPMP

(-) 

Net Value Added (NVAMP) or NDPMP


 NDPFC/NVAFC

(+)  (NFIA)

 (NNPFC)

Precautions
 
 
 
 
 

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  
 Self
consumption

 Imputed Rent of owner occupied
housesImputed Rent, Imputed Interest.
 Services of house
wives

 Second - hand goodsexisting
commodities

 Note:Broker

 Bonds and
Shares
Shares, Bonds 
 
   


 

 Replacement
Cost
 

 
FlourBaker 


 


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
 

 Self-consumption, owner - occupied buildings
Rents
 
 Industrial
Origin

 Income Method
 Factor Payment Method, Distributed Share Method, Income Paid Method,
Income received Method

 


 
=+++
+
 
 i)Domestic Factor Income 
 ii)(Net Factor Income from abroad)



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








 
 Labour Income/ Compensation of Employees
 Property Income/ Operating Surplus
 Mixed Income
 Compensation of
Employee

 LTC (Leave
Travel Concession) etc.
 Compensation in
Kind
 
Creches for children of Employees etc.
 Employer’s Contribution to social
security schemes

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 
 Operating
Surplus
Income from properly and enterpreneurship
 Rent of Self-occupied house (Imputed
Rent)
 
 
 Rent, Interest, RoyaltiesIncome from property
 

 
Undistributed profits
 Corporate Profit TaxCorporate
SavingDividends, Undistributed Profits, Corporate TaxIncome
from entre preneurship 
 Mixed
Income:
Labour IncomeProperty and Entrepreneurship
Carpenters

II) (NFIA)
=R  
P
 NDPFC =+ Operating Surplus +
 NNPFC = NDPFC + NFIA
 = [COE + OS + mixed Income] + NFIA
  = +
 
 Self-consumption), Imputed rent of the Self - occupied
houses

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 Oldage Pensions,



 illegal drug Traders


 
 
 Second hand goods, bonds,
shares 
  Pocket
Money  

 (windfall gains)
 prizes


 


 


 
 
 (windfall gains)
 prizes


 


 


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
 
  

 


 

 Expenditure Method
 Income Disposal Method, Consumption and Investment Method

 


Consumption and Investment Method
 
 (Household sector)
 Business/Producing Sector
 Government Sector
  Rest of the World (Row)
 
 Consumption Expenditure) C
 Investment Expenditure) I
 Government Expenditure) G
 (Export-Imports) X-M
 (C):
  

 non-durables goods
 durable goods) TV,AC 
 
 Retail Prices 
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 
 
 Self-Consumption 
 Imputed Rent on Self - occupied houses
B) (I):


  

 Gross Domestic Capital Formation
(GDCF)
 

  
Commodity Flow ApproachMajor
repairs, Renovations
Note:Capital goods


 C)
: 
Final goods awaiting
sale
 Change in stock = closing stock - opening stock.
 +
+
Replacement
amount Depreciation

 Net Domestic Investment = Gross Fixed Business Investment +
Inventory Investment +
Gross Residential Investment - Depreciation
C)(G):
 

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
     
 



 
Hospitals


   
 =
++

 
D) Net Exports (X-M):


 
Net Exports = Exports - Imports
 (Domestic product) 
 Open Economy


handicrafts

 


 


  

 = + NFIA
 GDP
 GDPMP= C + I + G + (X=M)

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Nots:GDPNDP


 GDPMPNFIAGNPMPNNPMP
 NNPFC
 (NI) = C + I + G + (X-M) + NFIA - D - Net IT
  C + I + G + (X - M)

GDPMP

(+) NFIA

GNPMP

(-) Depreciation

NNPMP

(-) Net IT

NNPFC / National Income.
Note: * GDP (X-M) 
  * GDP .... NFIA (R-P)GNP
   









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

 
- Self - consumption, Imputed values.
 
 Second - hand goods
 Financial
assets

 

 


 
 


 


www.kautilyacareers.com 040-27665101 9515870609

ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS


 GNP

 


 
GNP 
  


 
GNP
 Purchase of Second Hand Machine of a Domestic Service
:
 Purchase of New Shares of a Domestic firm :

GNP
 
 NI 
 
 (Wind fall gain) 
 Remittances from Abroad
:
 GNP NNP 

 

  GNP 
 Gift Tax : 
 



 


www.kautilyacareers.com 040-27665101 9515870609

ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS

 imputed value 

 
 


 

 
 WHO  
 Provident Fund
 

 
 
 MP  



 GNP

 GNP
GNP
 GNP

 GNP


 


 
GNP
 (illegal money) :GNP 


www.kautilyacareers.com 040-27665101 9515870609

ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS


 

 
 

       
     Value
Added Method    
       Manufacturing 
       
    Manufacturing  
        
     
      
 
   
 
C.S.O 
 CSO
   
     
     
     “Agriculture, Forestry
and fishing
     
     
  
 
    Manufacturing
     
     
     

www.kautilyacareers.com 040-27665101 9515870609

ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS

     
     
  
  
   =+
   
  
  
   
    
    
     
 





 
 
 
 
 


  

 Growth Rates
      
      
      
      
      
www.kautilyacareers.com 040-27665101 9515870609
ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS

  










 


  GDPFC  NNPFC
   
   
   
   
   
 
 
 GDP
 NNPFC  (GDP) 
FC

   

   
   
   
 

   NNPFC PCI (Per Capital Income)
    

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ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS

    

    
    
    
    
    
    
    
    
    
 (Source: Economic Survey 2010-11)
 
 

 

 
 GDPFC
   
   
   
   
   
  
 GDP
     
 PE 
 QE  
 AE  
 
   
    

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 NNPFC  NNPFC PCI

 
    
 
    
P    
Q    

 


 


 
Q

  


 

 (Q)  
 
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
www.kautilyacareers.com 040-27665101 9515870609
ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS




www.kautilyacareers.com 040-27665101 9515870609

ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS








www.kautilyacareers.com 040-27665101 9515870609

ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS







www.kautilyacareers.com 040-27665101 9515870609

ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS









www.kautilyacareers.com 040-27665101 9515870609

ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS







www.kautilyacareers.com 040-27665101 9515870609

ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS







www.kautilyacareers.com 040-27665101 9515870609

ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS

www.kautilyacareers.com 040-27665101 9515870609

ONLINE CLASSES FOR TSPSC/APPSC/UPSC/SSC/BANKING/RAILWAYS





www.kautilyacareers.com 040-27665101 9515870609