National Income of India - Calculating National Income India, National Income

According to the famous economist J.M. Keynes national income is the money value of all the goods and services produced in a country during a year. The National income of any country shows the economic position of the country. It is the national income which helps to compare the progress of the country over a period of time. The study of National income is important because of the following reasons:

There are various methods for calculating the national income such as production method, income method, expenditure method etc.

Calculation of National Income of India: A Brief History
The first attempt to calculate National Income of India was made by Dadabhai Naroji in 1867 -68. This was followed by several other methods. The first scientific method was made by Prof. V.K.R Rao in 1931-32. But this was not very satisfactory. The first official attempt was made by Prof.P.C.Mahalnobis in 1948-49, who submitted his report in 1954.

Difficulties in Calculation of National Income
In India people who are calculating the national incomes have shown the various difficulties in calculating the national income. The most severe one is the finding of reliable data. Most of the time, it is based on assumptions. Soon after independence the National Income Committee was formed to collect data and estimate national income. The two major problems which remain in the calculation of National Income are:

Obstacles in High Growth of National Income of India
It is also estimated that in the next 10 years India's national income is going to suffer because of diseases. Various diseases such as stroke, diabetes are going to cost India a loss of nearly $200billion. The government of India must try to frame suitable strategies for evolving greater generation of goods. Unemployment which is a big problem of the Indian economy must be solved. Only when people will be employed they will be able to earn contribute in the national income.

The other major factors which are going to hurt the National Income of India are: Slow growth of agricultural sector, defect in planning, poverty etc.
A higher national income will result in a prosperous economy.