Economy · X-Factor Notes
National Income and Gross Domestic Product revision notes for UPPCS Prelims.
24 revision facts
| Concept | What to remember | Asked in UPPCS |
|---|---|---|
| National Income (NI) | Represents Net National Product (NNP) at Factor Cost (FC(NNP)). | I.A.S. (Pre) 1997 |
| National Income (NI) / | Defined as Gross National Product at market prices minus depreciation and indirect taxes plus subsidies. | I.A.S. (Pre) 2001 |
| Gross National Product (GNP) | Refers to the total monetary value of all the final goods and services produced by the normal residents of a country in a specific time period. | I.A.S. (Pre) 2013 |
| NNP at Market Price (N.N.P.MP) | Calculated as Gross National Product at Market Price minus Depreciation. | R.A.S./ R.T.S. (Pre) 2021 |
| Net Domestic Product (NDP) | Calculated as Gross Domestic Product (GDP) minus Depreciation. | Chhattisgarh P.C.S. (Pre) 2020 |
| NDP as a Metric | NDP is the better metric for comparing economies than GDP, as it reveals the amount of investment spent on improving obsolete equipment to maintain the production level. | Chhattisgarh P.C.S. (Pre) 2020 |
| National Income in Open Economy (Y) | Calculated as: Y = C + I + G + (X – M), where (X – M) represents Net exports. | I.A.S. (Pre) 2000 |
| Real Income (Price/Monetary Change) | If over a given period both prices and monetary income have been doubled, the real income will be unchanged. | UPPCS (Mains) 2004 |
| GNP and NNP | These are recognized as Value measures of the National production. | (Implicit in defining concepts) |
| Concept | What to remember | Asked in UPPCS |
|---|---|---|
| GDP Calculation Methods | The three methods used are the Product method, Income method, and Expenditure method. The diminishing cost method is not used. | |
| Data Estimation Agency (Present) | The estimates of National Income are currently prepared and released by the National Statistical Office (NSO) (formed by merging CSO and NSSO in 2019). | UPPCS (Pre) 1995, 2006; UPPCS (Mains) 2006, 2012 |
| Base Year (Definition) | Refers to the year whose prices are used as reference prices to calculate the real GDP or real National Income. | |
| Current Base Year | The present base year for National Income estimation in India is 2011-12. | UPPCS (Mains) 2015, 2016 |
| Vital Measurement Change | The vital change in measurement recently involved changing both the base year (to 2011-12) and the calculation method (from factor cost to Gross Value Added at basic prices). | |
| Calculation Problem (India) | One of the main problems in calculating National Income in India is the non-organized sector (due to inadequate records). |
| Concept | What to remember | Asked in UPPCS |
|---|---|---|
| Most Appropriate Growth Measure | The most appropriate measure of a country’s economic growth is its Per Capita Product (PCP) or Per Capita Real Income/Net National Product. | UPPCS (Pre) 2013; I.A.S. (Pre) 2001; |
| Sign of Economic Growth | A sustained increase in real Per Capita Income is a definitive sign of economic growth. | |
| Indicator of Standard of Living | The standard of living in a country is represented by Per Capita Income. | UPPCS (Mains) 2013 |
| Sector with Highest GDP Share | The sector contributing most to India's GDP (Gross Domestic Product) is the Tertiary sector (Services). | UPPCS (Mains) 2017, 2004; |
| Per Capita Income Lag | The low share of labor in GNP is attributed to the fact that wages lag behind prices. | UPPCS (Mains) 2008 |
| Concept | What to remember | Asked in UPPCS |
|---|---|---|
| First Estimator of NI in India | Dadabhai Naoroji was the first person to estimate national income (and Per Capita Income at Rs. 20) in India (1867-68). | I.A.S. (Pre) 2000; UPPCS (Mains) 2013 |
| First Scientific NI Determination | National Income was first scientifically determined in India by Dr. V.K.R.V. Rao (in 1931-32). | |
| National Income Committee (1949) | The committee, appointed by the Government in 1949, was chaired by Prof. P.C. Mahalanobis. | UPPCS (Mains) 2015 |
| Nature of Indian Economy | Indian Economy is a Mixed economy, which means the Existence of both private and public sectors. | UPPCS (Pre) 1990; UPPCS (Pre) (Re-Exam) 2015 |
