Importance of National Income Statistics
There are several important uses of national income statistics and, therefore, there is great need for their regular preparation. National income estimates provide not only a single figure showing the national income, but also supply the detailed figures in regard to the various components of the national income. It is both the figure of national income and the details regarding its various constituents that throw light on the functioning and performance of the economy. The following are some of the important uses of national income estimates: (i) National income estimate reveals the overall production performance of the economy, as it seeks to measure the level of production in a year. Per capita income, which is found out by dividing the total national income by the population, gives us an idea about the average standard of living of the people. Economic welfare depends to a considerable degree on the level of national income and the average standard of living of the people. Thus, the figures of national income and per capita income indicate the level of economic welfare of the people of a country. (ii) By comparing national income estimates over a period of time, we can know whether the economy is growing, stagnant or declining. If the national income increases over years, it means that the economy is growing. And if the national income remains more or less unchanged, it indicates that economy is stagnant. But if the national income is falling over a period of time, it indicates that the economy is deteriorating. In case the economy is growing, we can also judge the rate of economic growth or development by measuring the rate of increase in national income. Further, by comparing the per capita income over years, we can know the changes in the standards of living and economic welfare of the people. (iii) The national income estimates show the contribution made by the various sectors of the economy, such as agriculture...
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