Topics
National Income and Related Aggregates
- Macroeconomics Vs Microeconomics
- Representative Goods and Sectors
- Macroeconomic Agents and Government Role
- Emergence of Macroeconomics
- Context of the Present Book of Macroeconomics
- Meaning of Economic Wealth and Final Goods
- Stocks, Flows, and Depreciation
- Capital Formation, Trade-off & Circular Flow of Income
- Circular Flow of Income and Methods of Calculating National Income
- Output Method/Product Method
- Expenditure Method
- Income Method
- Factor Cost, Basic Prices and Market Prices
- Some Macroeconomic Identities
- National Disposable Income
- Private Income
- National Income Aggregates
- Real GDP and Nominal GDP
- GDP and Welfare
Introductory Macroeconomics
Introduction
- A Simple Economy
- Central Problems of an Economy
- Concepts of Production Possibility Frontier
- Organisation of Economic Activities
- Positive and Normative Economics
- Macroeconomics Vs Microeconomics
Development Experience (1947-90) and Economic Reforms since 1991
- India's Economy Before Independence
- Low Level of Economic Development Under the Colonial Rule
- Agricultural Sector in India
- Industrial Sector
- Foreign Trade of India
- Demographic Condition
- Occupational Structure
- Infrastructure
- Post-Independence Economic Systems and Planning
- Five Year Plans (FYP)
- Agriculture
- Industry and Trade
- Trade Policy: Import Substitution
- The 1991 Economic Crisis and Reforms
- Background of the New Economic Policy
- Liberalisation
- Privatisation
- Globalisation
- World Trade Organisation (WTO)
- Impact of the Economic Reforms
Current Challenges Facing Indian Economy
- Concept of Human Capital
- Sources of Human Capital
- Human Capital and Economic Growth
- Human Capital and Human Development
- State of Human Capital Formation in India
- Growth of Education Sector in India
- Challenges and Future Prospects in Education
- Rural Development in India
- Credit and Marketing in Rural Areas
- Agricultural Market System
- Diversification into Productive Activities
- Sustainable Development and Organic Farming
- The Nature and Importance of Work in Society
- Workers and Employment
- Participation of People in Employment
- Self-employed and Hired Workers
- Employment in Firms, Factories and Offices
- Growth and Changing Structure of Employment
- Informalisation of Indian Workforce
- Concept of Unemployment
- Government and Employment Generation
- Environment and Sustainable Development in India
- State of India’s Environment
- Concept of Sustainable Development
- Strategies for Sustainable Development
Money and Banking
- Concept of Money
- Functions of Money
- Demand for Money and Supply of Money
- Money Creation by Banking System
- Limits to Credit Creation and Money Multiplier
- Policy Tools To Control Money Supply
- Demand and Supply for Money : A Detailed Discussion
- The Transaction Motive
- The Speculative Motive
- Various Measures of Supply of Money
- Narrow and Broad Money
- Demonetisation
Theory of Consumer Behaviour
- Consumer Behaviour: The Problem of Choice
- Basic Concepts of Microeconomics > Utility
- Cardinal Approach (Utility Analysis)
- Derivation of Demand Curve in the Case of a Single Commodity
- Ordinal Utility Analysis/Indifference Curve Analysis
Indian Economic Development
Determination of Income and Employment
- Aggregate Demand and Its Components
- Consumption
- Investment
- Determination of Income in Two-sector Model
- Determination of Equilibrium Income in the Short Run
- Macroeconomic Equilibrium with Price Level Fixed
- Effect of an Autonomous Change in Aggregate Demand on Income and Output
- The Multiplier Mechanism
- Paradox of Thrift
- Equilibrium Output and Employment
Development Experience of India – a Comparison with Neighbours
Introductory Microeconomics
Production and Costs
- Production Function
- Basics of Production Theory
- Variation of Output in the Short-Run Returns to a Factor
- Relation Between Total, Average and Marginal Product
- Law of Variable Proportions
- Average and Marginal Physical Products
- Changes in Production
- Cost - Fixed Cost
- Cost -variable Cost
- Behaviour of Cost in the Short - Run
- Relationship Between Average Variable Cost and Average Total Cost and Marginal Cost
- Concept of Opportunity Cost
- Marginal Revenue
- Producer's Equilibrium
- Law of Supply
- Market Supply Schedule
- Distinguish between Stock and Supply
- Determinants of Supply
- Movements Along and Shifts in Supply Curve
- Measurement of Elasticity of Supply
- Methods of Measurement of National Income
- Cost Concepts > Marginal Cost
- The Law of Diminishing Marginal Product
- Shapes of Product Curves
- Costs in Long Run Period
- Returns to Scale
The Theory of the Firm Under Perfect Competition
- Concept of Market
- Market Equilibrium
- Determination of Market Equilibrium
- Effect of Simultaneous change in Demand and Supply on Equilibrium Price
- Perfect Competition
- Imperfect Competition
- Classification of Market Structure
- Oligopoly
- Market Forms - Perfect Oligopoly
- Market Forms - Imperfect Oligopoly
- Equilibrium Price
- Applications of Tools of Demand and Supply Price Control
- Price Ceiling
- Price Floor
- Revenue Concepts
- Profit Maximisation Objective
- Determinants of a Firm’s Supply Curve
- Market Supply Schedule
- Price Elasticity of Supply
Government Budget and the Economy
Market Equilibrium
- Simple Monopoly in the Commodity Market
- Other Non - Perfectly Competitive Markets
Balance of Payments
- Open Economy and Its Linkages
- Concept of Balance of Payments
- Current Account
- Capital Account
- Balance of Payments Surplus and Deficit
- Foreign Exchange Market
- Foreign Exchange Rate
- Determination of the Exchange Rate
- Merits and Demerits of Flexible and Fixed Exchange Rate Systems
- Managed Floating Exchange Rate System
Estimated time: 14 minutes
CBSE: Class 12
CISCE: Class 12
CISCE: Class 12
Meaning
Private Income is the current income received by the private sector from all sources.
It includes:
- Factor incomes (including retained profits of private firms).
- Current transfers from the government and abroad.
CISCE: Class 12
Definition: Private Income (According to C.S.O.)
- "Private income is the total of factor incomes from all sources and current transfers from the Government and rest of the world accruing to private sector." – C.S.O.
- Private income refers to the current income received from all the sources of private sector consisting of private enterprises and factor owners.
- Private income refers to the income obtained by private individuals from any source whether productive or unproductive.
CBSE: Class 12
CISCE: Class 12
CISCE: Class 12
Formula: Private Income
1. Domestic Product Approach
Private Income = Factor income from NDP accruing to private sector + National debt interest + Net factor income from abroad + Current transfers from government + Other net transfers from rest of the world
2. National Income Approach (NNP at Factor Cost)
Private Income = NNP at FC − Government property & entrepreneurial income − Savings of non-departmental govt. enterprises + Interest on national debt + Net current transfers from government + Net current transfers from abroad
3. C.S.O. Approach (Alternative)
Private Income = National Income + Transfer payments + Interest on public debt − Social securities − Profits & surpluses of public undertakings
Or equivalently:
Private Income = Domestic Income + Net factor income from abroad + Net transfer payments − Government income
CISCE: Class 12
Items Deducted from National Income
| Item Deducted | Reason |
|---|---|
| Government property & entrepreneurship income | Belongs to the government sector, not the private sector |
| Savings of non-departmental government enterprises | Government retained earnings; not private income |
CISCE: Class 12
Items Added to National Income
| Item Added | Reason |
|---|---|
| Interest on national debt | Transfer payment from government to private sector |
| Net current transfers from government | Direct transfers to the private sector |
| Net current transfers from abroad | Inflow from the rest of the world |
CISCE: Class 12
Purpose of Private Income
- It partitions national income between the private sector and the government sector.
- It is used to assess the pre-tax income of the private sector for policy and tax decisions.
CBSE: Class 12
CISCE: Class 12
CISCE: Class 12
Key Points: Private Income
- Private income = income received by the private sector from all sources (factor incomes + transfer incomes).
- Derived from NNP at Factor Cost by deducting government income and adding transfer payments.
- Deduct: Government property/entrepreneurial income + savings of non-departmental government enterprises.
- Add: Interest on national debt + net current transfers from government + net current transfers from abroad.
- Three equivalent formulas — NCERT approach, NNP at FC approach, and C.S.O. approach — all yield the same result.
- Private income is a pre-tax measure; it does not equal personal income (further deductions are needed to arrive at personal income).
Related QuestionsVIEW ALL [3]
Calculate National Income and Private Income :
| (Rs crores) | ||
| (i) | Net imports | 5 |
| (ii) | Net domestic capital formation | 15 |
| (iii) | Personal income | 90 |
| (iv) | National debt interest | 10 |
| (v) | Corporate tax | 25 |
| (vi) | Government final consumption expenditure | 20 |
| (vii) | Net factor income to abroad | (−) 5 |
| (viii) | Net indirect tax | 10 |
| (ix) | Undistributed profits | 0 |
| (x) | Private final consumption expenditure | 100 |
Find national income and private income:
| (Rs crore) | ||
| (i) | Rent | 200 |
| (ii) | Net current transfer to abroad | 10 |
| (iii) | National debt interest | 60 |
| (iv) | Corporate tax | 100 |
| (v) | Composition of employees | 900 |
| (vi) | Current transfers from government | 150 |
| (vii) | Interest | 400 |
| (viii) | Interest | 50 |
| (ix) | Undistributed profits | 250 |
| (x) | Net factor income to abroad | (-)10 |
| (xi) | Income accruing to government | 120 |
