Understanding the Indian Economy from the Post-Reforms of 1991, Volume II

CHAPTER 10

India’s National Income

The aim of this chapter is to provide an understanding about the concept of national income with emphasis on analysis of various aspects of India’s national income, savings, and investment.

The concept: In the words of Kuznets (1948), national income is the net output of commodities and services flowing during the year from the country’s productive system into the hands of the ultimate consumers or into net addition to the country’s capital goods. This relationship is expressed in the national income identity, where the amount received as national income is identical to the amount spent as national expenditure, which is also identical to what is produced as national output. The terms income, output, and expenditure ...