Economy; Unemployment and National income

  • Unemployment –
    • A person working 8 hours a day for 273 days of the year is regarded as employed on a standard person year basis.
    • B Bhagwati committee (1973), setup by planning commission gave three estimates of unemployment –
      • Usual principal status (UPS).
        • Employed persons who remains unemployed for a major part of the year, also called open unemployment.
      • Current weekly status (CWS).
        • Unemployed persons who did not find even an hour of work during the survey week.
      • Current daily status (CDS).
        • Persons who did not find work on a day or some days during the survey week.
        • This is comprehensive measure of unemployment including chronic as well as under unemployment.
  • Some flagship programmes of government of India –
ProgrammeInaugurated on
T B mission 2020Year 2014
Sukanya samridhi yojana22nd January 2015
Skill India22nd January 2015
Digital India20th August 2014
Make in India26th September 2014
Sansad adarsh gram yojana11th Oct 2014
Pradhan mantri krishi sinchayee yojanaJan 2014
Swatch Bharat abhiyan2nd October 20
Soil health card scheme for every farmer 
Kisan TV 
Deendayal upadhayay gram jyoti yojana 
Van bandhu kalian yojana 
Beti bachao beti padhao yojana 
Shyama Prasad mukherjee rural mission 
Financial inclusion mission 
Housing for all by 2022 
Pradhan mantra jan dhan yojana 
  • National income of India.
    • It is a flow concept.
    • Financial year is from 1st April to 31st March.
    • According to national income committee (1949) “A national income estimate measures the volume of commodities and service turned out during a given period counted without duplication”.
    • When the national income is measured at the base year price, it is called national income at constant price.
    • When national income is measured at the current year price it is called national income at current year price.
    • NNPFC = NNPMP – indirect taxes + subsidies + government surplus
      • NNP – net national product.
      • FC – fact or cost.
      • MP – market price.
    • NI (national income) = NNP + subsidies – indirect taxes.
    • NI = C + G + I + (X-M) + (R-P) – depreciation – indirect tax + subsidies.
      • C – Total consumption expenditure.
      • G – Total government expenditure.
      • I – Total investment expenditure.
      • X – Import.
      • M – Export.
      • (R-P) – Net fraction income from abroad.
        • R – Received.
        • P – Payments.
    • GNP (gross national product) = depreciation – indirect taxes + subsidies.
    • National income is the measurement of the production power of an economic system in a given time period.
    • National wealth is the measurement of the present assets available at a given time. It is a stock concept.
  • Method of measuring national income –
    • Product method.
      • Net value of final goods and services produced is called total final product. It represents GDP.
      • Net income earned in foreign boundaries by nationals is added and depreciation is subtracted from GDP.
    • Income method.
      • Total net income earned by working people in different sectors and commercial enterprises is obtained.
      • Income of both categories of people, paying taxes and not paying taxes are added to obtain national income.
    • Consumption method / Expenditure method.
      • National income is the addition of total consumption and total savings.
  • In India a combination of production method and income method is used for estimating national income.
  • In 1868, first attempt to estimate national income was made by Dadabhai naroji in his book ‘Poverty and un British rule in India’. He estimated per capita income to be 20 Rs.
  • First scientific attempt to estimate national income was made by Prof. V K R V Rao in 1931-32. He divided Indian economy into 13 sectors.
  • In 1949 national income committee was made, chairman was Prof. P C Mahalanobis and other two members were Prof. V K R V Rao and Prof. D R Gadgil. This committee gave its first report in 1951 and its final report in 1954.
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