1. PRESENTED BY - Dr. R. S. Dhankaria Course Director & Principal
K.V. Khatkhati.
On 27th September 2010 at KV Dimapur
related with three days workshop for PGT Economics.

2. National Income Accounts

3. National income accounts
The three methods of national income accounting

4. The circular flow of national income and expenditure

5. The circular flow of national income and expenditure
(1) Production
(2) Incomes
(3) Expenditure

6. The circular flow of income
Firms
Factor
payments
Consumption of
domestically
produced goods
and services (Cd)
Households

7. The circular flow of income
Export
expenditure (X)
INJECTIONS
Government
expenditure (G)
Investment (I)
Consumption of
domestically
produced goods
and services (Cd)
BANKS, etc
Net
saving (S)
ABROAD
Import
expenditure (M)
Factor
payments
GOV.
Net
taxes (T)
WITHDRAWALS

8. The circular flow of income
Export
expenditure (X)
INJECTIONS
Government
expenditure (G)
Investment (I)
Consumption of
domestically
produced goods
and services (Cd)
BANKS, etc
Net
saving (S)
ABROAD
Import
expenditure (M)
Factor
payments
GOV.
Net
taxes (T)
WITHDRAWALS

9. The Circular Flow of Income
Withdrawals
net saving
net taxes
import expenditure
Injections
investment
government expenditure
export expenditure

10. Different Concepts/Aggregates of Domestic and National Income
DOMESTIC INCOME
NATIONAL INCOME

11. National income accounts
Methods of national income accounting
(a) The product approach /Value Added Method

12. Domestic and National Income Value Added Method Sales + Change in Stock = Gross Value of output (-) Intermediate Consumption

13. = G V ( - ) Depreciation = - Net Indirect Tax(IT - Subsidies) = of Primary Sector + of Secondary Sector + of Territory Sector + NFIA =

14. National income accounts
Methods of national income accounting
(b) The income approach

15. Compensation of Employees (Wages and Salaries+ Employers contribution to social security scheme + retirement pension) + Operating Surplus ( Rent + Royalty + Interest +Profit) (Dividends + undistributed profit Corporate Tax) + Mixed Income of Self Employed = + NFIA

16. National income accounts
Methods of national income accounting
(c) The expenditure approach

17. Private Final Consumption Expenditure + Government Final Consumption Expenditure + Gross Fixed Capital Formation + Change in Stock (Closing Stock – Opening Stock) + Net Export (Export – Import)

18. = GDP@MP (-) Depreciation = NDP@MP (-) Net Indirect Tax = NDP@FC + NFIA = NNP@FC

19. Private Income
Income from Domestic Product Accruing to Private Sector + Interest on National Debt Current Transfer of Government Current Transfer of Rest of the World Net Factor Income from Abroad (NFIA) = Private Income

20. Personal Income
Private Income (-) Corporate Saving / Undistributed Profit Corporate Tax / Corporate Profit Tax = Personal Income

21. Personal Disposal Income
Personal Income
(-)
Personal Direct Taxes
Miscellaneous Government Receipt
= Personal Disposal Income
= Consumption + Savings

22. Gross National Disposal Income
+ Net Current Transfer from Rest of the World = Gross National Disposal Income

23. Net National Disposal Income +
Net Current Transfer from Rest of the World =
Net National Disposal Income

24. THANKS.