National Income Plans

National income may be defined as the value of services and goods manufactured by a country or region throughout the financial year. Thus, national income is considered as the net outcome of all monetary actions of several countries during the financial year of one year and is esteemed in relation to money. National income is an undefined term that is coupled interchangeably with national dividends, national expenditure, and national output. This concept can be understood with the national income description.

National Income Definition

National income may be defined as the set of methods and principles which are used to ration the production and income of the country. There are fundamentally two methods of calculating national economic movement: the money worth of the total manufacture of services and goods throughout the given period (usually a year) or the total of incomes consequent from financial activity after the grant has been prepared for capital consumption.

Objective: Lesson Plan on National Income

The lesson plan on national income comprises the objectives, fundamentals, and eliminations of the lesson educating students on how to identify and measure the gross national income (GNI) and the gross domestic product (GDP) as part of the national income and how to characterize the different methods to measure national income.

• Understand the movement of money among families and firms.
• Differentiate among the definitions and mechanisms of GNI and GDP, also understand GDP and GNI as the events of national income.
• The three most important ways to measure the GDP/GNI are the output approach (production approach), expenditure approach, and  income approach.
• The connection between savings, investment, and consumption.
• Recognize how the per capita of GDP/GNI is computed.
• The alteration among real GNI/GDP and nominal (money) GNI/GDP.

Concept of National Income

There are several ways which are coupled with national income and related measurements of them.

Gross Domestic Product (GDP): Three methods to measure GDP is:

• Expenditure Method: On the basis of the expenditure method, the overall expenditure sustained by the culture in a specific year is collected together and contains individual consumption expenditure, government expenditure on services and goods, net domestic investment, and net foreign investment.
• Product Method: According to the production method, the overall worth of finished services and goods manufactured in the country throughout the year is intended at market values. To measure the GNP, the records of all productive events, like woods from forests, commodities, agricultural products, minerals from the mines. Specifically, the finished services and goods are involved, and the middle goods and services are left behind.
• Income Method: In terms of the Income method, the overall revenue received by each and every person of the country during the specific year is additional, i.e., net wages that accrue to all factors of production by way of net rents, net wages, net profit, and net interest are all collected with each other but incomes received by the citizen by the method of transfer, payments are not involved in it.

• GDP at Factor Cost

It is further divided into:

1. Compensation of employees
2. Self-employed or Mixed

Income

• Net Domestic Product (NDP)

• Nominal and Real GDP

• GDP Deflator

• Gross National Product (GNP)

GNP is further divided into:

1. Income Method to GNP
2. Expenditure Method to
3. GNP
4. Value Added Method to GNP

• GNP at Market Prices

• GNP at Factor Cost

• Net National Product (NNP)

• NNP at Market Prices

• Private income

• Disposable income

• Personal income

• Per capita income etc.

Growth of National Income: Five Years Plan

The latest five years plan is known as Twelfth Plan, which is concluded in March 2017. The Twelfth Five-Year Plan is planned in such a way that the Indian government decided to accomplish the target for a growth rate of 9%; nevertheless, National Development Council (NDC) approved a growth rate of 8% for the upcoming five years plan. 

Twelfth Five Plans

With the failing global market situation, Montek Singh Ahluwalia, head of the planning commission, had said that attaining a normal growth of 9% in the upcoming five years is close to impossible. So, the final development goal has been approved 8% via planning of the National Development committees meeting that took place in New Delhi.

Conclusion

This article may conclude in ways such as National income may be defined as the set of methods and principles which are used to ration the production and income of the country. Furthermore, each and every country has the most priority for the national income as it shows the development and future of the country. The national income of the country mostly depends on the production and exportability of the country.