Page 62 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Indian Economic Policy

Notes family welfare. Taking community and personal services a group, there was an improvement
in its share from 10.6 percent in 1950-51 to 13.4 percent in 2010-11.
• The theory of economic growth also supports the structural change in the composition of national
product. The distribution of gross domestic product in developed countries indicates a much
higher share of industry and services and a relatively lower share for agriculture. The disparity
in per capita incomes between developed and underdeveloped countries is largely a reflection
of the disparity in the structure of their economies.
• National Accounts Statistics (1999) and (2006) and give a break-up of the net domestic product
for the rural and urban sectors separately. The data reveal that as against 62.4 per cent of the
total NDP being contributed by the rural sector in 1970-71, its share in NDP declined to 54.3 per
cent in 1993-94.
• “National income is nothing more than a simple linear aggregation of income accruing to the
factors of production supplied by the normal residents of the country in question.” Thus, while
making an estimate , of national income millions of economic quantities have to be added up.
• The National Statistical Commission headed by Mr. C Rangarajan, former Governor of the
Reserve Bank of India has drawn attention to major gaps in the Indian Statistical System due to
the absence of certain key datasets at the state level. These include cost of cultivation studies for
most crops, Index of Industrial Production (IIP), Wholesale Price Index (WPI) and Consumer
Price Index (CPI).
• The Commission noted that the states of Karnataka and Rajasthan have recently constituted
expert groups to develop State Domestic Product and to bring about improvement in the
compilation of these estimates. Other states should also undertake similar exercises.
5.4 Key-Words

1. Disparity : The condition or fact of being unequal, as in age, rank, or degree; difference
2. Inflation : In economics, inflation is a rise in the general level of prices of goods and services in
an economy over a period of time. When the general price level rises, each unit of
currency buys fewer goods and services. Consequently, inflation also reflects an
erosion in the purchasing power of money - a loss of real value in the internal
medium of exchange and unit of account in the economy.

5.5 Review Questions

1. What do you mean by national income ? How it estimate.
2. Examine the Trends in National Income Growth and Structure.
3. Describe the limitations National Income Estimation in India.
4. Explain the reason for the slow rate of Growth of the Indian Economy.
5. Discuss the trends and structure of national income.
Answers: Self-Assessment

1. (i)(a) (ii)(a) (iii)(b) (iv)(c)
5.6 Further Readings

1. The Indian Economy; S.K. Ray; Prentic, Hall of India Private Limited
New Delhi - 110001.
2. Indian Economy; Gaurav Datt and Aswani Mahajan; S. Chand and Company
LTD. Ram Nagar, New Delhi-110055.

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