Features of National Income

Features of National Income

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1. National Income is a great illustration of macroeconomic concept. It addresses the "aggregate" or "economy expressed as a whole." The overall economic performance over the course of a year is depicted in the National Income report.

2. The idea of National Income as a flow National Income is the flow of actual produced goods and services. In the process of production, income generation, and expenditure, it is a flow concept. The formula is as follows: "National Income is a realized flow of goods and services," or "final goods and services" as they are actually produced. "National product = National dividend = National expenditure.

3. The total amount of goods and services produced in the current year is included in the National Income. The total amount of goods and services produced in the current year is known as the final goods and services.

4. National Income is the value of goods and services in money. The current year's value of goods and services is expressed in terms of their market price. This is measured every year.

5. Only the value of final goods and services is included in National Income; it does not include the value of intermediate goods and services. National Income does not include the value of intermediate goods and services because it is already included in the value of final goods and services. This is done to avoid double counting.

6. The value of economic or productive activity is included in the National Income. The value of activities that are exchanged for money, such as the services of housewives, is not included in National Income.

7. The net aggregate value of goods and services produced in the economy is the net/actual aggregate value of National Income. As a result, the gross value is reduced by the value of depreciation, or "wear and tear on capital," during production.

8. The net income from foreign trade is included in the National Income calculation, which includes the net income from exports and imports as well as receipts and payments from foreign trade and foreign transactions.

9. Transfer earnings, such as pensions, unemployment benefits, scholarships, and other benefits, are not taken into account in order to avoid counting them twice. are left out of the National Income calculation.

10. When calculating National Income, indirect taxes are subtracted. National Income is expressed at the market price, which includes indirect taxes. Money is transferred to the government through indirect taxes from consumers and producers. At market prices, indirect taxes are deducted from National Income to avoid double counting.

11. When calculating National Income, subsidies are added. National Income is expressed at the market price, which does not include subsidies. A financial transfer from the government to consumers occurs through subsidies. Subsidies are added to National Income at market prices in order to accurately calculate it.

12. The mathematical expression for National Income is NI = NI(mp) – IT + S. 14. National Income is always expressed in terms of a time period, and in India, the financial year runs from April 1 to March 31 each year.