Importance of National Income Analysis

Importance of National Income :

1) For the Economy :
National income data are important for the economy of a country. In present times, the national income data are regarded as accounts of the economy, which are known as ‘Social Accounts’. It tells us how the aggregates of a nation's income, output and product result from the income of different individuals, products of industries and transactions of international trade.
2) National policies :
National income data forms the basis of national policies such as employment policy, industrial policy, agricultural policy etc. These figures enable us to know the direction in which the industrial output, investment and saving etc., change. National Income also helps to generate economic models like growth model, investment models etc. Thus, proper 
measures can be adopted to bring the economy to the right path. 
3) Economic planning :
For economic planning, data pertaining to national income is very essential. This includes data related to a country's gross income, output, savings, investment and consumption which can be obtained from different sources. 
4) Economic Research :
National income data are also used by the research scholars of economics. They make use of various data of the country's input, output, income, savings, consumption, investment 
employment etc., which are obtained from social accounts.
5) Comparison of Standard of Living :
National income data helps us to compare the standards of living of people in different countries and of people living in the same country at different times.
6) Distribution of Income :
National income statistics enables us to know about the distribution of income in the country from the data related to wages, rent, interest and profits. We understand the disparities in the incomes of different sections of the society.