There are 3 methods to calculate the National income.These methods are given by Simon Kuznets.
- PM (Product Method) or Product service method.
- IM (Income Method)
- CM (Consumption Method) or expenditure method.
In India the combination of Product method and Income methods is used for calculating the National Income.
NI = GDP – income earned in foreign countries – Depreciation.
In the Product method the GDP is taken into consideration.Net income earned in foreign countries is deducted from the GDP.From this the depreciation is subtracted.
In this method the National Income is calculated by
National Income = Total Rent Plus (+) Total wages Plus (+) Total Interest Plus (+) Total Profit.
The total net income of the people working in different sectors and commercial sectors are taken into consideration.
This method is not generally used for calculating the National income.According to this method
- National Income =Total Consumption Plus Total Savings
RAS-RTS FREE Notes brings Prelims and Mains programs for RAS-RTS FREE Prelims and RAS-RTS FREE Mains Exam preparation. Various Programs initiated by RAS-RTS FREE Notes are as follows:-
- RAS-RTS FREE Mains 2020 Tests and Notes Program
- RAS-RTS FREE Prelims Exam 2020- Test Series and Notes Program
- RAS-RTS Prelims and Mains Tests Series and Notes Program
- RAS-RTS Detailed Complete Prelims Notes