Page 61 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Unit 5: Trends and Structure of National Income Since 1951

Self-Assessment Notes
1. Choose the correct option:
(i) The government of India appointed the national income committee in August,……..
(a) 1949 (b) 1989
(c) 1984 (d) None of these.
(ii) The final report of the National Committee appeared in
(a) 1954 (b) 1960
(c) 1965 (d) None of these.
(iii) During the perceptible improvement in growth rate during the
(a) Seventies (b) Eighties
(c) Nineties (d) None of these.
(iv) The chairman of National Statistical Commission was
(a) V.K Rao (b) C. Rangrajan
(c) Rajesh Shukla (d) None of These.

5.3 Summary

• According to the National Income Committee, “A national income estimate measures the volume
of commodities and services turned out during a given period, counted without duplication.”
Thus, a total of national income measures the flow of goods and services in an economy. National
Income is a flow and not a stock. As contrasted with national wealth which measures the stock
of commodities held by the nationals of a country at a point of time, national income measures
the productive power of an economy in a given period to turn out goods and services for the
satisfaction of human wants.
• Several estimates of national income were prepared in the British period. Notable among the
estimators were : Dadabhai Naoroji (1868), William Digby (1899), Findlay Shirras (1911, 1922
and 1931), Shah and Khambatta (1921), V.K.R.V. Rao (1925-29 and 1931-32) and R.C. Desai
(1931-40).
• Soon after Independence, the Government of India appointed the National Income Committee
in August. 1949, so as to compile authoritative estimates of national income. The Committee
consisted of Professor P.C. Mahalanobis. Professor D.R. Gadgil and Professor V.K.R.V. Rao.
The final report of the National Income Committee appeared in 1954.
• 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.
• In order to understand the impact of planning in India, a study of trends in national income is
necessary. If 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.
• Figures of national and per capita income are collected at current prices. But figures of national
income at current prices do not give a correct picture about the growth of the economy, for the
increase in national income at current prices reflects the combined influence of two factors viz.,
(a) the increase in the production of real goods and services and (b) the rise in prices.
• There was a very perceptible improvement in growth rate during the eighties. During 1980-81
and 1990-91, net national product showed a growth rate of 5.2 per cent per annum and the per
capita NNP (at 1999-00 prices) improved on an average by 3.0 per cent per annum.
• The process of economic development involves a rapid expansion of public administration
especially a rapid expansion of economic and welfare services such as education, health and

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