Analysis

Analysis National income is of great importance for the economy of a country. Nowadays the national income is regarded as accounts of the economy, which are known as social accounts. It enables us . To know the relative importance of the various sectors of the economy and their contribution towards national income; from the calculation of national income, we could find how income is produced, how it is distributed, how much is spent, saved or taxed. . To formulate the national policies such as monetary policy, fiscal policy and other policies; the proper measures can be adopted to bring the economy to the right path with the help of collecting national income data. . To formulate planning and evaluate plan progress; it is essential that the data pertaining to a country’s gross income, output, saving and consumption from different sources should be available for economic planning. . To build economic models both in short - run and long - run. . To make international comparison, inter - regional comparison and inter - temporal comparison of growth of the economy during different periods. . To know a country’s per capita income which reflects the economic welfare of the country (Provided income is equally distributed) . To know the distribution of income for various factors of production in the country. . To arrive at many macro economic variables namely, Tax – GDP ratio, Current Account Deficit - GDP ratio, Fiscal Deficit - GDP ratio, Debt - GDP ratio etc. - - National Income