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Daily Lecture Series Ramesh Singh's A brief Summary of Indian-Economy Overview Hindi unacadeny By Aartee Mishra
l am Aartee Mishra Graduated from Delhi University, Topper in all my semesters, Pursuing P.G and preparing for CSE. You can findall my courses at https:/unacademy.com/userIranianmishra2011 Also by Downloading the Unacademy Learning app from the Google Playstore
NDP Net Domestic Product (NDP) is the GDP calculated after adjusting the weight of the value of 'depreciation' The governments of the economies decide and announce the rates by which assets depreciate (done in India by the Ministry of Commerce and Industry) NDP = GDP-Depreciation The different uses of the concept of NDP are as given below: a. For domestic use only: to understand the historical situation of the loss due to depreciation to the economy. Also used to understand and analyse the sectoral situation of depreciation in industry and trade in comparative periods b. To show the achievements of the economy in the area of research and development, which have tried cutting the levels of depreciation in a historical time period NDP is not used in comparative economics, i.e., to compare the economies of the world. Why this is so? This is due to different rates of depreciation which is set by the different economies of the world
NNP Net National Product (NNP) of an economy is the GNP after deducting the loss due to 'depreciation'. The formula to derive it may be written like: NNP GNP Depreciation or, NNP GDP +Income from Abroad - Depreciation The different uses of the concept of NNP are as given below: V This is the 'National Income' (NI) of an economy. Though, the GDP, NDP and GNP, all are 'national income' they are not written with capitalised 'N and T Y This is the purest form of the income of a nation V When we divide NNP by the total population of a nation we get the per capita income' (PCl) of that nation, i.e., 'income per head per year'
Cost and Price of National Income Basically, there are two sets of costs and prices; and an economy needs to choose at which of the two costs and two prices it will calculate its national income Cost: Income of an economy, i.e., value of its total produced goods and services may be calculated at either the 'factor cost' or the 'market cost' What is the difference between them? Basically, 'factor cost' is the 'input cost' the producer has to incur in the process of producing something (such as cost of capital, i.e., interest on loans, raw materials, labour, rent, power, etc.). This is also termed as factory price or 'production cost/price' This is nothing but 'price' of the commodity from the producer's side. While the 'market cost' is derived after adding the indirect taxes to the factor cost of the product, it means the cost at which the goods reach the market, i.e., showrooms (these are the cenvat/central excise and the CST which are paid by the producers to the central government in India) This is also known as the 'ex-factory price'. The weight of the state taxes are then added to it, to finally derive the 'market cos '. In general, they are also called 'factor price' and 'market price'
Cost and Price of National Income Since January 2015, the CSO has switched over to calculating it at market price (i.e., market cost). The market price is calculated by adding the product taxes (generally taken as the indirect taxes of the Centre and the States) to the factor cost Price: Income can be derived at two prices, constant and current. The difference in the constant and current prices is only that of the impact of inflation Current price is, basically, the maximum retail price (MRP) which we see printed on the goods selling in the market. India calculates its national income at constant prices-so is the situation among other developing economies, while the developed nations calculate it at the current prices
Cost and Price of National Income V Income of a person has three forms-the first form is nominal income (the wage someone gets in hand per day or per month), the second form is real income (this is nominal income minus the present day rate of inflation adjusted in percentage form), and the last one is the disposable income (the net part of wage one is free to use which is derived after deducting the direct taxes from the real/nominal income, depending upon the need of data) Unlike India, among the developed nations, inflation has been around 2 per cent for many decades (it means it has been at lower levels and stable too V This is why the difference between the incomes at constant and current prices among them are narrow and they calculate their national income at current prices. They get more reliable and realistic data of their income).
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