National income of India SARBJEET KAUR Lecturer in Economics

Meaning of National Income Various estimate of national Income Causes of Low National Income Major Features of national income in India Sect oral contribution of national income Inter state variations in national income

National Income The total net value of all goods and services produced within a nation over a specified period of time, representing the sum of wages, profits, rents, interest, and pension payments to residents of the nation.

National income estimate Year of estimate National Income (Rs. Crore) Per Capita Income (Rs) Dadabhai Naroji 1868 370 20 Findley Shirras 1911 1942 80 V K R V Rao 1931-32 1689 62 Ministry of Commerce 1945-46 6234 198

Difficulties in measuring National income in India Non Monetized Output and its transaction Non Availability of Information about petty income Lack of Differentiation in Economic function Unreported Illegal income Lack of Reliable Statistical data

Trends In National Income of India GDP Growth rate of India at2004 – 05 (%) 2005-06 2006-07 2007-08 2008-09 2009-10 9.5 9.7 9.2 6.7 7.2 2 . Growth in per capita income (Rs) at current price and at 2004-05 (constant price) Current Price 2005-06 2006-07 2007-08 2008-09 2009-10 27,183 31,080 35,430 40,141 43,749 Constant Price32,012 34,533 37,328 38,695 40,745 Note:2004 -05 is takes as the base year (for constant price) Source :Economic Survey 2009-10

3. Sector wise rate of growth at factor cost at 2004-2005 prices (per cent) 2005-06 2006-07 2007-08 2008-09 2009-10 Agriculture 5.2 3.7 4.7 1.6 -0.2 Mining 1.3 8.7 3.9 1.6 8.7 Manufacturing 9.6 14.9 10.3 3.2 8.9 Electricity, 6.6 10.0 8.5 3.9 8.2 Gas & Water Supply Construction 12.4 10.6 10.0 5.9 6.5 Trade, Hotels 12.4 11.2 9.5 5.3 8.3 & Restaurants Banks,Insurance12.8 14.5 13.2 10.1 9.9 and Real Estate Community, 7.6 2.6 6.7 13.9 8.2 and Social Services Source :Economic Survey 2009-10

Causes for slow growth of National income High growth rate of population Excessive dependence on Agriculture Occupational structure Low level of technology and its poor Adoption Poor Industrial development Poor development of Infrastructure facilities

Poor rate of saving and Investment Social Political condition

Major feature of national Income In India Excessive dependence on Agriculture Poor Growth rate of GDP and per capita income Unequal distribution and poor standard of living Growing contribution of tertiary sector

Unequal Growth of different sectors Regional disparity Urban and rural disparity

Suggestion to raise the level of national income Development of agriculture sector Development of Industrial sector Raising the level of saving and Investment Develoment of infrastructure Optimum utilization of natural resources Removal of Inequality

Control over Population Balanced growth Higher growth of Foreign trade

Trends for Interstate Variation in National Income and GDP There is vast variation amongst the Indian states w.r.t per capita income and their contribution to national income. 4. CONTRIBUTION OF STATES IN INDIA’S NDP High Income States % share in NDP MAHARASHTRA 13.3 % UTTAR PRADESH 8.0 % ANDHRA PRADESH 7.7 % WEST BENGAL 7.2 % GUJARAT 6.8 %

Per capita income of different states Low income states % share in NDP JHARKHAND 1.6 ASSAM 1.7 CHATTISGARH 1.8 ORISSA 2.4 BIHAR 2.7 Per capita income of different states High income states Per capita income (Rs p.a) Low income states Per capita income (Rs p .a) GOA 1,05,582 BIHAR 11,135 HARYANA 58,531 UTTAR PRADESH 16,060 MAHARASHTRA 47,051 MADHYA PRADESH 18,051 GUJARAT 45, 773 JHARKHAND 19,928 PUNJAB 44,923 ORISSA 23,403

Causes of Inter state variations Historical Factors Geographical factors Location Advantages Failure of economic planning Marginal effect of Green revolution Political instability