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प्रश्न
Answer the following question.
Define the problem of double counting in the computation of national income. State any two approaches to correct the problem of double counting.
उत्तर
Double counting refers to a situation where the value of a good is taken into account (counted) more than once. Such a problem occurs because, for every producer, the commodity he sells is the final commodity. Thus, if every time the value of the good is taken into account, then it will lead to the estimation of the value of the product more than once.
For instance, in the example of the production of cloth, for the cotton farmer cotton is the final product and he sells it for Rs 500. Thus, for him, the cost of the final output is Rs 500. Similarly for the weaver, who sells weaved cotton for Rs 700, weaved cotton is the final product, and the cost of the final output is Rs 700. Next, the textile producer converts the weaved cotton into cloth and sells it to the retailer for Rs 900, for him the cloth is the final product, and the cost of the final output is 900. The retailer then sells the cloth for Rs 1100.
The total value of the final output in the process is Rs 3,200 (i.e. Rs 500 + Rs 700 + Rs 900 + Rs 1,100). But, in this manner, the value of cotton is counted four times, the value of thread three times, and that of cloth twice.
In other words, there is an overestimation of the value of the goods produced.
Efforts must be taken to reduce double counting by the following two approaches:
- By considering only the value added by each production unit
- By considering only the final goods and services (i.e. excluding intermediate consumption) in the estimation of the national income.
संबंधित प्रश्न
Find national income and private income:
(Rs crore)
(i) Wages and salaries 1,000
(ii) Net current transfer to abroad 20
(iii) Net factor income paid to abroad 10
(iv) Profit 400
(v) National debt interest 120
(vi) Social security contributions by employers 100
(vii) Current transfers from government 60
(viii) National income accruing to government 150
(ix) Rent 200
(x) Interest 300
(xi) Royalty 50
Other things remaining unchanged, when in a country the price of foreign currency rises, national income is: (choose the correct alternative)
a. Likely to rise
b. Likely to fall
c. Likely to rise and fall both
d. Not affected
A government of India has recently launched 'Jan-Dhan Yojana' aimed at every household in the country to have at least one bank account. Explain how deposits made under the plan are going to affect the national income of the country.
How should the following be treated in estimating the national income of a country? You must give a reason for your answer.
Taking care of aged parents
Distinguish between:
Output method of measuring national income and Income method of measuring national income.
Write short note on:
Expenditure method of measuring national income.
Write short note on:
Personal disposable income
Define or explain the following concept:
National income
Give reason or explain the following statement:
Income from second hand sale of goods is excluded from national income.
Give reason or explain the following statement:
National income at factor cost includes subsidy.
PASSAGE
Corona has slowed down the economy Lockdown imposed to contain the spread of Corona virus had resulted in closure of manufacturing and business activities. During this financial year, the economy is expected to move towards a contractionary phase rather than expansionary phase. This has been stated in the budget. This is the first paperless budget in the history of India. At the same time, it is the third post-independence budget to be presented at a time when the economy is shrinking. The budget shows a fiscal deficit of more than 5%.
The Union Finance Minister has presented a budget that seeks to accelerate the economy by balancing the impact of Corona on the economy on one hand and growing expectations of all sectors on the other. A significant increase in the allocation for Healthcare by 137% is a feature of this budget. In this budget, the expected revenue for the year 212-2022 is Rs. 34,35, 000crore and the expected expenditure is Rs. 35,83, 000 crore.
Attempts have been made to boost infrastructure, education, agricultural production, employment generation and industry, but the Income tax status quo has remained the same. The budget provides Rs.16.5 lakh crore for agricultural credit, Rs. 223,000 crore for health facilities, Rs. 3 lakh crore for Power Distribution Scheme, Rs. 15,700 crore for Small and Medium Enterprises and Rs. 20,000 crore for Government Bank Capital.
- What is the percentage increase in the provision for Healthcare? (1 mark)
- Mention the sectors that have been promoted in this budget. (1 mark)
- Express your personal opinion based on the above information regarding the budget ( 2 marks)
GNP =______ + Net factor income from abroad.
When net factor income from abroad is deducted from NNP, the net value is______.
Write a short note on per capita income.
Nominal GNP is same as ____________.
Which of the following items are excluded from GNP measurement?
Which one is true?
NNPMP =?
How should the following be treated in estimating National Income of a Country? Give valid reasons.
Profit earned by Foreign Banks in India.
