Question

List out the incomes/items that are considered, not considered or deducted while calculating national income through production method.

Answer 1

Types of incomes and their role while calculating national income:

(I) Incomes that are considered:

• Finished goods and services
• Imputed rent
• Export

(II) Incomes that are not considered:

• Service of housewives
• Self-consumption (Except that produced by Indian farmers)
• Things produced for defence or police
• Double counting of goods/services
• Resale of goods and services
• Smuggled/Illegal goods

(III) Incomes or items that are deducted:

• Depreciation
• Indirect taxes are deducted whereas subsidies are added