NATIONAL INCOME
DEFINITION
Annual income of a family is the sum total of income it receives from
various sources
during a year. It is on this basis that the economic position of a family
is determined.
Factors of production like land, labour and capital are owned by Households
and
they generate income in the form of rent, wages, interest and profit
respectively. An
economy is divided mainly into three sectors - Agricultural sector,
Industrial sector and
Service sector. Therefore, when we calculate the annual income of a nation,
naturally
we have to take into account the income from various sectors. These sectors
produce
innumerable items of goods and services ranging from ball pins to space
shuttles
during a year. The sum total of these goods and services is the gross
production of the
country. When we express the value of these goods and services in terms of
money,
we get national income. Gross National Product and Net National Product
help us to
understand economic progress.
J.M.Keynes, a famous economist defined national income as follows.
"National Income
is the money value of all goods and services produced in a country during a
year"
While family income reflects the economic position of households, national
income
shows the economic position of a nation. The basic objective of an economy
is to
achieve economic progress. This is achieved by coordinating natural
resources, human
resources, capital, technology etc. National income will help to assess and
compare
the progress achieved by a country over a period of time.
SOURCES OF INCOME
It is not that countries which are endowed with a bounty of natural wealth-
minerals or
forests or the most fertile lands - are naturally the richest countries. In
fact the resource
rich Africa and Latin America have some of the poorest countries in the
world, whereas
many prosperous countries have scarcely any natural wealth.
There was a time when possession of natural resources was the most
important
consideration but even then the resource had to be transformed through a
production
process. The economic wealth, or well-being, of a country thus does not
necessarily
depend on the mere possession of resources; the point is how these
resources are used
in generating a flow of production and how, as a consequence, income and
wealth are
generated from that process. People combine their energies with natural and
manmade
environment within a certain social and technological structure to generate
a flow of
production.
TYPE OF GOODS
FINAL GOOD
An item that is meant for final use and will not pass through any more
stages of
production or transformations an article of clothing which is then ready to
be sold finally
to the consumers for final use. Such a good is called a final good.
They are called final good because once it has been sold it passes out of
the active
economic flow. Thus the tea leaves purchased by the consumer are not
consumed in
that form - they are used to make drinkable tea, which is consumed. Similarly
most
of the items that enter our kitchen are transformed through the process of
cooking.
But cooking at home is not an economic activity, even though the product
involved
undergoes transformation. Home cooked food is not sold to the market. However,
if
the same cooking or tea brewing was done in a restaurant where the cooked
product
would be sold to customers, then the same items, such as tea leaves, would
cease to
be final goods and would be counted as inputs to which economic value
addition can
take place. Thus it is not in the nature of the good but in the economic
nature of its use
that a good becomes a final good.
Final goods may be of two types consumption goods and capital goods. Goods
like food, we can distinguish between and clothing, and services like
recreation that
are consumed when purchased by their ultimate consumers are called
consumption
goods or consumer goods. (This also includes services which are consumed
but for
convenience we may refer to them as consumer goods.)Then there are other
goods
that are of durable character which are used in the production process.
These are
tools, implements and machines. While they make production of other
commodities
feasible, they themselves don't get transformed in the production process.
They are
also final goods yet they are not final goods to be ultimately consumed.
Unlike the final
goods that we have considered above, they are the crucial backbone of any
production
process, in aiding and enabling the production to take place. These goods
form a part
of capital, one of the crucial factors of production in which a productive
enterprise has
invested, and they continue to enable the production process to go on for
continuous
cycles of production. These are capital goods and they gradually undergo
wear and
tear, and thus are repaired or gradually replaced over time. The stock of
capital that
an economy possesses is thus preserved, maintained and renewed partially or
wholly
over time. We may note here that some commodities like television sets,
automobiles or
home computers, although they are for ultimate consumption, have one
characteristic
in common with capital goods - they are also durable. That is, they are not
extinguished
by immediate or even short period consumption; they have a relatively long
life as
compared to articles such as food or even clothing. They also undergo wear
and tear
with gradual use and often need repairs and replacements of parts, i.e.,
like machines
they also need to be preserved, maintained and renewed. That is why we call
these
goods consumer durables.
INTERMEDIATE GOODS
Thus if we consider all the final goods and services produced in an economy
in a given
period of time they are either in the form of consumption goods (both
durable and nondurable) or capital goods. As final goods they do not undergo
any further transformation
in the economic process. Of the total production taking place in the
economy a large
number of products don't end up in final consumption and are not capital
goods either.
Such goods may be used by other producers as material inputs. Examples are
steel
sheets used for making automobiles and copper used for making utensils.
These are
intermediate goods, mostly used as raw material or inputs for production of
other
commodities. These are not final goods.
Now, to have a comprehensive idea of the total flow of production in the
economy, we
need to have a quantitative measure of the aggregate level of final goods
produced in
the economy. However, in order to get a quantitative assessment - a measure
of the
total final goods and services produced in the economy - it is obvious that
we need a
common measuring rod. We cannot add metres of cloth produced to tonnes of
rice or
number of automobiles or machines. Our common measuring rod is money. Since
each
of these commodities is produced for sale, the sum total of the monetary
value of these
diverse commodities gives us a measure of final output. But why are we to
measure
final goods only? Surely intermediate goods are crucial inputs to any
production process
and a significant part of our manpower and capital stock are engaged in
production of
these goods. However, since we are dealing with value of output, we should
realise
that the value of the final goods already includes the value of the
intermediate goods
that have entered into their production as inputs. Counting them separately
will lead
to the error of double counting. Whereas considering intermediate goods may
give a
fuller description of total economic activity, counting them will highly
exaggerate the
final value of our economic activity.
DEPRECIATION
A significant part of current output of capital goods goes in maintaining
or replacing
part of the existing stock of capital goods. This is because the already
existing capital
stock suffers wear and tear and needs maintenance and replacement. A part
of the
capital goods produced this year goes for replacement of existing capital
goods and is
not an addition to the stock of capital goods already existing and its
value needs to be
subtracted from gross investment for arriving at the measure for net
investment. This
deletion, which is made from the value of gross investment in order to
accommodate
regular wear and tear of capital,is called depreciation.
Net Investment = Gross investment - Depreciation
We can imagine as if the machine is being gradually used up in each year's
production
process and each year one twentieth of its original value is getting
depreciated. So,
instead of considering a bulk investment for replacement after twenty
years, we consider
an annual depreciation cost every year. This is the usual sense in which
the term
depreciation is used and inherent in its conception is the expected life of
a particular
capital good, like twenty years in our example of the machine. Depreciation
is thus an
annual allowance for wear and tear of a capital good.In other words it is
the cost of the
good divided by number of years of its useful life. Notice here that depreciation
is an
accounting concept. No real expenditure may have actually been incurred
each year
yet depreciation is annually accounted for.
Year after year we can imagine the aggregate income of the economy going
through
the two sectors,firms and households, in a circular way. When the income is
being
spent on the goods and services produced by the firms, it takes the form of
aggregate
expenditure received by the firms. Since the value of expenditure must be
equal to the
value of goods and services, we can equivalently measure the aggregate
income by
"calculating the aggregate value of goods and services produced by the
firms". When
the aggregate revenue received by the firms is paid out to the factors of
production it
takes the form of aggregate income.
Methods of calculating National Income
National Income calculation is not an easy task. For this, we have to
collect more facts
and figures. We have already seen that income is generated through
production process
Normally we use this income for purchasing goods and services. When demand
for
commodities goes up, we have to produce more. Thus income leads to
expenditure
which again leads to increased production.
Considering the nature and requirements of the economy one or more methods
are
used for calculating national income. Let us examine these methods
separately.
Production Method
This method is based on the total production of a country during a year.
First of all
production units are classified into primary, secondary and tertiary
sectors Then we
identify the various units that come under these sectors. We estimate the
goods and
services produced in each of these sectors. The sum total of products
produced in these
three sectors is the total output of the nation. The next step is to find
out the value of
these products in terms of money. The money sent by Indian citizens working
abroad
is also added to this. Now we get the gross national income.
GDP = Money value of total goods and services + Income from abroad.
Income Method
Factors of production together produce output and income. The income
received by the
factors of production during a year can be obtained by adding rent to land,
wages to
labour, interest to capital and profit to organisations. This will be equal
to the income of
the nation. In other words, total income is equal to the reward given to
various factors of
production. By adding the money sent by the Indian citizens from abroad to
the income
of the various factors of production, we get the gross national income.
GDP = Rent + Wage + Interest +Profit + Income from abroad.
This method will help us to know the contributions made by different agents
like landlords,
labourers, capitalists and organizers to national income.
Expenditure Method
National income can also be calculated by adding up the expenditure
incurred for goods
and services. Government as well as private individuals spend money for
consumption
and production purposes. The sum total of expenditure incurred in a country
during a
year will be equal to national income.
GDP
Individual Expenditure + Government Expenditure.
This method will help us to identify the expenditure incurred by different
agents.
Any one of the above methods can be used for calculating national income.
Production method = Income method = Expenditure method.
SOME MACROECONOMIC IDENTITIES
Gross Domestic Product measures the aggregate production of final goods and
services
taking place within the domestic economy during a year.
GDP Value of all services produced within the country + value of all goods
produced
within the country.
Gross National Product (GNP)
But the whole of it may not accrue to the citizens of the country. For
example, a citizen
of India working in United States may be earning her wage and it will be
included in the
United States GDP.
But legally speaking, she is an Indian. When we try to compensate this, in
order to
maintain symmetry, we must deduct the earnings of the foreigners who are
working
within our domestic economy, or the payments to the factors of production
owned by the
foreigners. For example, the profits earned by the Korean-owned Hyundai car
factory
will have to be subtracted from the GDP of India. The macroeconomic
variable which
takes into account such additions and subtractions is known as Gross
National Product
(GNP). It is,therefore, defined as follows
GNP
GDP + Factor income earned by the domestic factors of
production employed in the rest of the world - Factor income earned
by the factors of production of the rest of the world employed in
the domestic economy.
Hence, GNP
GDP + Net factor income from abroad
We have already noted that a part of the capital gets consumed during the
year due to
wear and tear. This wear and tear is called depreciation. Naturally,
depreciation does
not become part of anybody's income. If we deduct depreciation from GNP the
measure
of aggregate income that we obtain is called Net National Product (NNP).
Thus
NNP
GNP - Depreciation
It is to be noted that all these variables are evaluated at market prices.
Through the
expression given above, we get the value of NNP evaluated at market prices.
But market
price includes indirect taxes. When indirect taxes are imposed on goods and
services,
their prices go up. Indirect taxes accrue to the government. We have to
deduct them
from NNP evaluated at market prices in order to calculate that part of NNP
which actually
accrues to the factors of production. Similarly, there may be subsidies
granted by the
government on the prices of some commodities (in India petrol is heavily
taxed by the
government, whereas cooking gas is subsidised). So we need to add subsidies
to the
NNP evaluated at market prices. The measure that we obtain by doing so is
called Net
National Product at factor cost or National Income.
Thus, NNP at factor cost
National Income (NI )
NNP at market prices -(Indirect
taxes - Subsidies)
NNP at market prices - Net indirect taxes (Net indirect taxes
Indirect taxes - Subsidies)
We can further subdivide the National Income into smaller categories. Let
us try to find
the expression for the part of NI which is received by households. We shall
call this
Personal Income (PI). First, let us note that out of NI, which is earned by
the firms and
government enterprises, a part of profit is not distributed among the factors
of production.
This is called Undistributed Profits (UP). We have to deduct UP from NI to
arrive at PI,
since UP does not accrue to the households. Similarly, Corporate Tax, which
is imposed
on the earnings made by the firms, will also have to be deducted from the
NI, since
it does not accrue to the households. On the other hand, the households do
receive
interest payments from private firms or the government on past loans
advanced by them.
And households may have to pay interests to the firms and the government as
well,
in case they had borrowed money from either. So we have to deduct the net
interests
paid by the households to the firms and government. The households receive
transfer
payments from government and firms (pensions, scholarship,prizes, for
example) which
have to be added to calculate the Personal Income of the households.
Personal Income (PI)
NI - Undistributed profits - Net interest
payments made by households - Corporate tax + Transfer payments
to the households from the government and firms.
However, even PI is not the income over which the households have complete
say.
They have to pay taxes from PI. If we deduct the Personal Tax Payments
(income tax,
for example) and Non-tax Payments (such as fines) from PI, we obtain what
is known
as the Personal Disposable Income. Thus
Personal Disposable Income (PDI )
National Disposable Income and Private Income
PI - Personal tax payments - Non-tax payments.
Personal Disposable Income is the part of the aggregate income which
belongs to the
households. They may decide to consume a part of it, and save the rest.
Apart from these categories of aggregate macroeconomic variables, in India,
a few
other aggregate income categories are also used in National Income
accounting
National Disposable Income
Net National Product at market prices + Other current
transfers from the rest of the world
The idea behind National Disposable Income is that it gives an idea of what
is the
maximum amount of goods and services the domestic economy has at its
disposal.
Current transfers from the rest of the world include items such as gifts,
aids, etc.
Private Income
Factor income from net domestic product accruing to the private
sector + National debt interest + Net factor income from abroad + Current
transfers
from government + Other net transfers from the rest of the world
Therefore, in order to compare the GDP figures (and other macroeconomic
variables) of
different countries or to compare the GDP figures of the same country at
different points
of time, we cannot rely on GDPs evaluated at current market prices. For
comparison
we take the help of real GDP. Real GDP is calculated in a way such that the
goods and
services are evaluated at some constant set of prices (or constant prices).
Since these
prices remain fixed, if the Real GDP changes we can be sure that it is the
volume of
production which is undergoing changes. Nominal GDP, on the other hand, is
simply the
value of GDP at the current prevailing prices. whose prices are being used
to calculate
the real GDP) to the current year. In the calculation For example, suppose
a country
only produces bread.
The ratio of nominal to real GDP is a well known index of prices. This is
called GDP
Deflator. Thus if GDP stands for nominal GDP and gdp stands for real GDP
then, GDP
deflator =GDP/gdp .
Sometimes the deflator is also denoted in percentage terms. In such a case
deflator =
GDP/gdp × 100 per cent.
Like GDP deflator, we can have GNP deflator as well.
There is another way to measure change of prices in an economy which is
known as the
Consumer Price Index (CPI). This is the index of prices of a given basket
of commodities
which are bought by the representative consumer. CPI is generally expressed
in
percentage terms.
Like CPI, the index for wholesale prices is called Wholesale Price Index
(WPI). In
countries like USA it is referred to as Producer Price Index (PPI). Notice
CPI (and
analogously WPI) may differfrom GDP deflator because
1.The goods purchased by consumers do not represent all the goods
whcih
are produced in a country. GDP deflator takes into account
all such goods and
services.
2. CPI includes prices of goods consumed by the representative
consumer, hence it includes prices of imported goods. GDP deflator
not include prices of imported goods.
3. The weights are constant in CPI - but they differ according to
production level of each good in GDP deflator.
does
GDP AND WELFARE
If the GDP of the country is rising, the welfare may not rise as a
consequence. This is
because the rise in GDP may be concentrated in the hands of very few
individuals or
firms. For the rest, the income may in fact have fallen. In such a case the
welfare of
the entire country cannot be said to have increased.
Many activities in an economy are not evaluated in monetary terms. For
example, the
domestic services women perform at home are not paid for. The exchanges
which take
place in the informal sector without the help of money are called barter
exchanges. In
barter exchanges goods (or services) are directly exchanged against each
other.
But since money is not being used here, these exchanges are not registered
as
part of economic activity. In developing countries, where many remote
regions are
underdeveloped, these kinds of exchanges do take place, but they are
generally not
counted in the GDPs of these countries. This is a case of underestimation
of GDP.
Hence GDP calculated in the standard manner may not give us a clear
indication of
the productive activity and well-being of a country.
Externalities refer to the benefits (or harms) a firm or an individual
causes to another
for which they are not paid (or penalised).Externalities do not have any
market in which
they can be bought and sold. For example, let us suppose there is an oil
refinery which
refines crude petroleum and sells it in the market. The output of the
refinery is the
amount of oil it refines. We can estimate the value added of the refinery
by deducting
the value of intermediate goods used by the refinery (crude oil in this
case) from the
value of its output. The value added of the refinery will be counted as
part of the GDP
of the economy. But in carrying out the production the refinery may also be
polluting the
nearby river. This may cause harm to the people who use the water of the
river. Hence
their well being will fall. Pollution may also kill fish or other organisms
of the river on
which fish survive. As a result the fishermen of the river may be losing
their livelihood.
Such harmful effects that the refinery is inflicting on others, for which
it will not bear
any cost, are called externalities. In this case, the GDP is not taking
into account such
negative externalities.
Therefore, if we take GDP as a measure of welfare of the economy we shall
be
overestimating the actual welfare. This was an example of negative
externality. There
can be cases of positive externalities as well. In such cases GDP will
underestimate the
actual welfare of the economy.
HISTORY OF STATISTICAL SYSTEM IN INDIA
The first attempt to calculate national income of India was made by Dada
Bhai Naoroji
in 1867-68. This was followed by several other attempts. The first
scientific attempt was
made by
Prof.V.K.R.V.Rao in 1931-32. But it was not a satisfactory attempt. The
first official
attempt was made by Prof.P.C.Mahalanobis in 1948- 49. The final report was
submitted
in 1954. Today national income is calculated and published by the Central
Statistical
Organisation. All the three methods are used for calculating national
income in India.
Though the first census of India was conducted in 1872 the first complete
Population
Census was conducted in 1881 on a uniform basis throughout the country.
Since then
the census is being conducted regularly after every ten years. For this
purpose, a
Census Commissioner was appointed by the Government before each census
assisted
by Provincial Superintendents and District Census Officers.
Only in 1948 following a Census Act, a permanent Office of the Registrar
General and
Census Commissioner was created.
The Indian Statistical Institute (ISI) was registered on 28 April 1932 at
Calcutta as
a nonprofit?distributing learned society under the Societies Registration
Act, 1860,
with Professor P.C. Mahalanobis as its founder Director. This was set up to
carry out
research, teaching, training and project activities, and it gradually
became an important
part of the statistical system of India, through its pioneering work on
large?scale sample
surveys, design of agricultural experiments, statistical quality control,
planning for
national development and use of electronic computers in statistical work.
By an Act of
Parliament, the Institute was declared as an "Institute of National
Importance" in 1959
and the right to hold examinations and award degrees and diplomas in
Statistics was
conferred on it. The Indian Statistical Institute (ISI), which is a premier
statistical institute,
receives budgetary support from the MOSPI.
Only after India became independent did the Government of India establish a
Central
Statistical Unit (1949), which was later (1951) converted into the Central
Statistical
Organisation (CSO) and the Department of Statistics, which constitute
presently the
National Statistical Organisation (NSO) of the Ministry of Statistics and
Programme
Implementation.
Professor P.C. Mahalanobis, who is regarded as a pioneer in both
theoretical and
professional statistics, was appointed as the first statistical adviser to
the Cabinet,
Government of India in January 1949. He was the architect of the
statistical system of
independent India.Professor P. V. Sukhatme, as Statistical Adviser to the
Ministry of
Agriculture, was responsible for the development of Agricultural
Statistics.
The coming of the era of developmental planning in India, gave significant
impetus to
the development of statistics. Important phases of this development are
enumerated
below:
(a) A nucleus statistical
unit was set up at the Centre in the Cabinet
Secretariat in 1949. This unit was developed later on in 1951 into
the Central
Statistical Organisation (CSO). The main responsibility
assignedtotheCSO
was to bring about coordination of statistical
activities among various statistical
agencies in the Central Govt.
and of Statistical Bureaus of State Governments,
which was set up
for similar coordination of activities of statistical agencies
at the
State level.
(b) A National Income
Committee was appointed in 1949 to work out a
system for reliable estimation of national income.
(c) The National Sample
Survey (NSS) came into being in 1950 to
collect information through sample surveys on a variety of socio
economic
aspects.
(d) In 1954, the National
Income Unit was transferred from the Ministry
o f
Finance to the CSO and a new Unit for Planning Statistics was set up.
(e) In 1957, the subject of
Industrial Statistics was transferred from the
Ministry of Commerce and Industry to the CSO.
(f) In April 1961, the
Department of Statistics was set up in the Cabinet
Secretariat and the CSO became a part of it.
(g) In 1972, a Computer
Centre in the then Department of Statistics was set up.
(h) In 1973, the Department
of Statistics became a part of the Ministry of Planning.
(i) In February 1999, the
Department of Statistics and the Department of Programme
Implementation were merged and named as the Department of Statistics and
Programme
Implementation under Ministry of
Planning and Programme Implementation.
(j) In October 1999, the
Department of Statistics and Programme
Implementation was declared as the Ministry of Statistics and
Programme Implementation (MoS&PI).
PRESENT STATISTICAL SYSTEM IN INDIA
The subject Statistics is in the Concurrent list.
The Indian Statistical System is largely decentralized with elements of
central supervision.
All?India large?scale statistical operations, such as Population Census,
Economic
Census, Agricultural Census and Livestock Census, and nationwide sample
surveys,
including the Annual Survey of Industries and the Socio?Economic Surveys,
as well as
compilation of macro?economic aggregates like national accounts, All?India
Price Indices
and industrial production, are mainly Central activities, with substantial
involvement of
State agencies in data collection. The State Governments and statistical
organisations
of the States also collect and generate data on a number of variables.
The Ministry of Statistics and Programme Implementation is the nodal agency
for
all statistical activities at all?India level. The Ministry has two wings,
one relating to
Statistics and the other is Programme Implementation. The Statistics Wing
called
National Statistical Organisation (NSO) consists of the Central Statistics
Office (CSO),
the National Sample Survey Office (NSSO), the Computer Centre and
Coordination &
Publication Division.
The State Directorates of Economics and Statistics (DESs) carry out the
responsibility
of coordination of all statistical activities at the State level and keeping
liaison with the
MOSPI for the purpose of coordination at all?India level, and for
maintaining norms and
standards in the field of official statistics.
CENTRAL STATISTICAL OFFICE (CSO) - earlier called as central statistical
organization. The CSO, headed by a Director General, consists of five
Divisions, namely,
the National Accounts Division (NAD), the Economic Statistics Division
(ESD), the Social
Statistics Division (SSD), the Training Division and the Coordination &
Publication Division
(CAP). The CSO has an Industrial Statistics Wing, namely, the CSO?IS Wing,
which is
located at Kolkata.
The Central Statistical Office is responsible for coordination of
statistical activities in
the country, and for evolving and maintaining statistical standards. Its
activities include
National Income Accounting; conduct of Annual Survey of Industries,
Economic Censuses
and its follow up surveys, compilation of Index of Industrial Production,
as well as
Consumer Price Indices, Gender Statistics, imparting training on Official
Statistics, Five
Year Plan work relating to Development of Statistics in the States and
Union Territories;
dissemination of statistical information, work relating to trade, energy, construction,
and
environment statistics, revision of National Industrial Classification,
etc.
NATIONAL SAMPLE SURVEY OFFICE (NSSO)
National Sample Survey (NSS) was set up in 1950 on the recommendations of
National
Income Committee, chaired by late Prof. P. C. Mahalanobis to fill up large
gaps in
statistical data for computation of national income aggregates, especially
in respect of
unorganized / household sector of the economy. Initially statistical work
of NSS except
for fieldwork used to be carried out by Indian Statistical Institute under
the guidance
of Prof. Mahalanobis, while NSS Directorate was created and assigned the
fieldwork.
NSS was reorganized as National Sample Survey Organisation (NSSO) in March
1970
on the recommendation of Review Committee Chaired by Sh. B. Sivaraman, when
all
aspects of NSS work was brought under a single organization under
Government of India.
However full integration was not possible until June, 1972 (on the eve of
launching of
NSS 27th round). In a way, this marked the end of an era in the history of
NSS. In the
new set-up Governing Council (GC) of NSSO with a non-official Chairman to
guide all the
activities of NSSO came in as the apex body of the new organization and NSS
surveys
were given a new perspective. In 2006, consequent to formation of National
Statistical
Commission, GC of NSSO was dissolved and a Steering Committee of National
Sample
Survey came in its place. The NSSO is now called as National Sample Survey
Office.
The NSSO functions under the overall direction of a Steering Committee with
requisite
independence and autonomy in the matter of collection, processing and
publication of
NSS data. In addition to the non?official Chairman, the Steering Committee
is composed
of academicians, data users from Central and State Government departments
and senior
officers of the Ministry. The NSSO is headed by the Director General and
Chief Executive
Officer (DG&CEO), who is also the Member?Secretary of the Steering
Committee.
Computer Centre: The Computer Centre handles the data processing jobs of
the MOSPI,
provides training to statistical personnel on software, maintain the
MOSPI's website and
the National Data Warehouse of Official Statistics.
Coordination and Publication Division (CAP): This Division is responsible
for coordination
for the National Statistical Organisation with its two attached offices
viz. the Central
Statistics Office (CSO) and National Sample Survey Office (NSSO) as also
with Central
Ministries/Departments of Government of India. It is also responsible for
coordination
with State Governments/ State statistical agencies.
Legal Support for Collection of Data: The Central Government's Allocation
of Business
Rules, 1961 (as amended from time to time) provides for the roles and
responsibilities
of the MOSPI. The main Statistics Act under which data is collected by the
MOSPI is
the 'Collection of Statistics Act, 2008". The other most important Act
for collection of
statistics on demographic aspects of population is the 'Population Census
Act 1948',
which is administered by the Office of the Registrar General of India,
functioning under the
Ministry of Home Affairs. Besides these two important Acts, there are a
number of Acts,
Rules and Procedures being administered by various administrative agencies
on their
subjects, through which statutory returns are collected by these
Ministries/Departments.
NATIONAL STATISTICAL COMMISSION
A Commission set up by the Government in January 2000 under the
Chairmanship of Dr.
C. Rangarajan reviewed the statistical system and the entire gamut of
Official Statistics
in the country. The Rangarajan Commission submitted its report to the
Government in
August 2001. One of the key recommendations of this Commission was to
establish a
permanent National Commission on Statistics to serve as a nodal and
empowered body
for all core statistical activities of the country, evolve, monitor and
enforce statistical
priorities and standards and to ensure statistical co-ordination among the
different
agencies involved. The Rangarajan Commission also recommended that the
Commission
be set up initially through a Government order.
Through the Government of India Resolution of 1st June 2005, Government has
set up
a Commission, namely, the National Statistical Commission (NSC) COMPRISING
A part-time Chairperson who will be an eminent statistician or social
scientist
Four part-time Members, one each from the following fields of
specialization and
experience in:
o & economic statistics in such areas as agriculture, industry,
infrastructure, trade or
finance,
social and environment statistics in such areas as population, health,
education, labour
and employment or environment,
statistical operations in such areas as censuses, surveys, statistical
information system
or information technology, and
national accounts, statistical modeling or State Statistical Systems.
The Secretary, Planning Commission as ex-officio Member.
The Secretary, Ministry of Statistics and Programme Implementation to
function as exofficio Member Secretary of the Commission till the Chief
Statistician of India assumes
office. The Chief Statistician of India, the post created specifically as
the Head of the
National Statistical Office will be the Secretary of the Statutory
Commission.
FUNCTIONS OF NATIONAL STATISTICAL COMMISSION
to identify the core statistics, which are of national importance and are
critical to the
development of the economy;
to constitute professional committees or working groups to assist the
Commission on
various technical issues;
to evolve national policies and priorities relating to the statistical
system;
to evolve standard statistical concepts, definitions, classifications and
methodologies in
different areas in statistics and lay down national quality standards on
core statistics;
to evolve national strategies for the collection, tabulation and
dissemination of core
statistics, including the release calendar for various data sets;
to evolve national strategies for human resource development on official
statistics
including information technology and communication needs of the statistical
system;
to evolve measures for improving public trust in official statistics;
to evolve measures for effective co-ordination with State Governments and
Union Territory
Administrations on statistical activities including strengthening of
existing institutional
mechanisms;
to exercise statistical co-ordination between Ministries, Departments and
other agencies
of the Central Government;
to exercise statistical audit over the statistical activities to ensure
quality and integrity of
the statistical products;
to recommend to the Central Government, or any State Government, as the
case may
be, measures to effectively implement the standards, strategies and other
measures
evolved under clauses (c) to (h);
to advise the Government on the requirement of legislative measures on
statistical
matters including the statute for the National Statistical Commission; and
to monitor and review the functioning of the statistical system in the
light of the laid
down policies, standards and methodologies and recommend measures for
enhanced
performance.
GDP ESTIMATES OF THE FISCAL 2009-10
The Indian economy witnessed a healthier growth of 7.4 per cent in 2009-10
as compared
to the 7.2 per cent estimated by the Central Statistical Organization (CSO)
earlier,
primarily owing to a stimulus-aided rebound in manufacturing coupled with a
betterthan-anticipated performance by the farm sector.
With this, India has maintained its position as the second fastest growing
economy after
China which posted an 11.9 per cent growth in the same quarter, even as
economic
recovery remains fragile in other economies, especially the Euro zone
countries which
are grappling with sovereign debt problems.
Ostensibly, the higher-than-expected GDP growth of 7.4 per cent for the
entire fiscal,
as per the revised estimates, points to the stimulus packages having paid
dividends
by way of excise duty and service tax cuts. This is evident from the
performance of the
manufacturing sector which rebounded with a growth of 10.8 per cent growth
during the
year from a low of 3.2 per cent in the previous fiscal.
The other sectors displayed a mixed trend. While the farm and allied
sectors performed
better than expected to post a growth of 0.2 per cent in 2009-10 as
compared to a decline
by 0.2 per cent as per CSO's advance estimates earlier, gross fixed capital
formation - a
measure of value addition in the economy or capital that is invested rather
than saved
-- also fell marginally to 32.4 per cent from 33 per cent.
As for manufacturing, mining and quarrying, the growth was in double digits
at 10.6 per
cent in 2009-10. Likewise, services, trade, hotels, transport and
communication also
fared better. The growth data for all the previous three quarters of
2009-10 also stood
revised.
As per the CSO data, the country's per capita income stood at Rs 44,345 in
2009-10,
more or less similar to what was estimated by the CSO earlier. It was
higher by 10.5 per
cent over Rs 40,141 a year ago.
The economy has been valued at Rs 62.31lakh crore for 2009-10.
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