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Unit 5: Trends and Structure of National Income Since 1951

were conducted. From the gross value of output so obtained, deductions for the cost of seed, Notes
manures and fertilisers, market charges, repairs and depreciation are made so as to derive net
value of the product from agriculture.
For animal husbandry, forestry, fishery, mining and factory establishments, estimates of
production are multiplied with market price so as to obtain the gross value of the output. From
the gross value of output deductions are made for cost of materials used in the process of
production and depreciation charges etc. to obtain net value added of each sector.
Net Income Method : In order to obtain the contribution of small enterprises an estimate for the
total number of workers employed in different occupations classified under small enterprises
is prepared. On the basis of sample surveys, the average earnings per head are obtained. By
multiplying the total number of persons employed with the average earnings per head, the
contribution of small enterprises is estimated. To provide for factor payments other than wages
and salaries, an addition of 20 per cent to the money earnings is made.
For Banking and Insurance the balance sheets of the firms provide the requisite information.
Wages, salaries, directors’ fees and dividends (distributed and undistributed) are all added to
get the net contribution of the sector.
For commerce and transport and for professions, liberal arts and domestic services, the procedure
is the same as for small enterprises.
For public sector, wages, salaries, pensions, other benefits, dividends or surplus, etc., are added
up to arrive at the contribution of the public sector. To this is added the contribution of
government construction and this gives the total contribution of the public sector.
(2) National Income Series at 1960-61 prices : This series provided national income data at current
prices and at 1960-61 prices for the period 1960-61 to 1975-76.
Another series was started with 1970-71 as base year instead of 1960-61.
Estimates based on different base years indicate differences in magnitudes, even when they are
deflated at constant prices either at 1948-49 or 1960-61 or 1970-71 prices. This is due to the
differences in weights used for the series.
The Central Statistical Organisation (CSO) brought out another Series on national income with
1980-81 as base year in place of the series with 1970-71 as the base year.
CSO Revised National Income Series with 1999-00 as Base Year

The Central Statistical Organisation (CSO) has revised the existing series of national accounts with
1993-94 as the base year with a new series with 1999-00 as the base year. Besides shifting the base
year, the New Series incorporates improvements in terms of coverage and to the extent possible, the
recommendations of the United Nations System of National Accounts, 1993 (1993 UNSNA) have
been incorporated.
The improvements in terms of coverage are the following :
(a) Inclusion of production of salt through sea water evaporation and the production of betel leaf,
toddy, goat, buffalo and camel milk, duck eggs and meat production from unregistered slaugh-tering.
(b) Expenditure made on few tree crops during the gestation period and setting up of wind energy
systems are included in the estimates of output of construction sector.
(c) A new category of ‘valuables’ has been included in the gross capital formation, in line with the
recommendations of 1993 UNSNA.
(d) Economic activities of other communication, renting of machinery and other equipment without
operator, computer related activities in unorganized segment, coaching centres, social work
with accommodation, recreational and cultural activities have been included.
5.2 Trends in National Income Growth and Structure

In order to understand the impact of planning in India, a study of trends in national income is necessary.
It would be, therefore, better if the trend in national income and changes in the structure of national
product are analysed over the last 57 years of planning.

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