Key Concepts & Self-Assessment15 Key Facts
Review key National Income Accounting: GDP, GNP, NNP & GVA exam facts and rate your mastery to track revision.
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#1
Dadabhai Naoroji made the first historical estimate of India’s national income in 1867–68, estimating per capita income at ₹20.
#2
Dr. V.K.R.V. Rao was the first economist to compute India’s national income using scientific statistical methods (1931–32).
#3
National Income in technical economic accounting is defined strictly as Net National Product at Factor Cost (NNP at FC).
#4
The National Statistical Office (NSO) under MoSPI compiles and publishes official national income statistics in India.
#5
Gross Value Added (GVA) measures sector-wise production value and equals GDP at market prices minus net product taxes (taxes − subsidies).
#6
Gross Domestic Product measures the monetary value of all final goods and services produced within the geographic boundary of a country during a financial year.
#7
Gross National Product equals GDP plus Net Factor Income from Abroad, accounting for domestic residents' earnings overseas minus foreign residents' earnings within the country.
#8
Net Domestic Product is calculated by deducting physical depreciation (capital consumption allowance) from Gross Domestic Product (NDP = GDP - Depreciation).
#9
The expenditure method computes GDP as the sum of private consumption, gross private investment, government purchases, and net exports (GDP = C + I + G + [X - M]).
#10
Real GDP measures economic output evaluated at constant base year prices, thereby eliminating the distorting effects of price inflation present in Nominal GDP.
#11
The GDP Deflator is the ratio of Nominal GDP to Real GDP multiplied by 100, functioning as an indicator of whole-economy price inflation.
#12
The Central Statistics Office revised India's GDP base year to 2011–12 in January 2015, transitioning headline reporting from GDP at factor cost to GVA at basic prices.
#13
Personal Income equals National Income minus undistributed corporate profits, corporate taxes, and net social security contributions, plus government transfer payments received by households.
#14
Disposable Personal Income equals Personal Income minus personal direct income taxes and non-tax administrative fees, representing actual purchasing power available for household consumption or savings.
#15
The National Income Committee appointed by the Government of India in 1949 was chaired by Prof. P.C. Mahalanobis, with Prof. D.R. Gadgil and Dr. V.K.R.V. Rao as members.
Subject Specialist Commentary
Analytical perspective & practical exam advice from the Master10 academic board
National income accounting measures the total monetary value of final goods and services produced within an economy over a financial year. The historical foundation in India began in 1867–68 when Dadabhai Naoroji estimated per capita income at ₹20, later formalized using scientific statistics by Dr. V.K.R.V. Rao. Today, the National Statistical Office compiles national accounts, where National Income is technically defined as Net National Product at Factor Cost.
Exam questions in UPSC and SSC frequently test accounting formulas and deflators. Avoid the trap of confusing Gross Domestic Product with Gross National Product: remember that GNP equals GDP plus Net Factor Income from Abroad, while Net Domestic Product subtracts capital depreciation from GDP. For prelims revision, recall that Real GDP adjusts for price inflation using constant base year prices (currently 2011–12), whereas Nominal GDP uses current market prices.
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