CONCEPT OF DISPOSABLE, PRIVATE AND PERSONAL INCOME ETC.

NATIONAL INCOME AND RELATED AGGREGATES 

DOMESTIC INCOME (NDPFC):- IT REFERS TO THE INCOME EARNED BY BOTH RESIDENT AND NON RESIDENT WITHIN THE DOMESTIC TERRITORY ONLY IN AN ACCOUNTING YEAR.

THE DOMESTIC INCOME INCLUDES THE INCOME OF BOTH PRIVATE AND GOVERNMENT SECTOR.

NATIONAL DISPOSABLE INCOME(NDI):- THIS INCOME REFERS TO THE NET INCOME AT MARKET PRICE AVAILABLE TO A COUNTRY FOR CONSUMPTION EXPENDITURE AND SAVING IN A YEAR.

NDI=  NNPFC + NIT + CURRENT TRANSFER FROM REST OF THE WORLD

NOTE:- IF YOU ARE GIVEN GROSS NATIONAL DISPOSABLE INCOME IN THE QUESTION, JUST SUBTRACT THE DEPRECIATION TO GET  NET NATIONAL DISPOSABLE INCOME.




FACTOR INCOME FROM NET DOMESTIC PRODUCT ACCRUING TO PRIVATE SECTOR(FIPS):- IT REFERS TO THAT PART OF INCOME WHICH IS EARNED BY THE PRIVATE SECTOR ONLY.

FIPS= NDPFC – INCOME FROM PROPERTY AND ENTERPRENURESHIP ACCRUING TO GOVT– SAVING OF NON DEPARTMENTAL ENTERPRISE.


PRIVATE INCOME:-  IT REFERS TO THE TOTAL INCOME EARNED AND RECEIVED BY THE PRIVATE SECTOR ONLY.

PRIVATE INCOME= INCOME FROM DOMESTIC PRODUCT ACCRUING TO PVT SECTOR+ NFIA+ CURRENT TRANSFER FROM GOVT + INTEREST ON NATIONAL DEBT+ CURRENT TRANSFER FROM REST OF THE WORLD.

INTEREST ON NATIONAL DEPT:- IT REFERS TO THE INTEREST RECEIVED BY THE PRIVATE SECTOR ON ACCOUNT OF ANY LOAN GIVEN TO THE GOVT.


PERSONAL INCOME:- IT IS THE PART OF PRIVATE INCOME WHICH RECEIVED BY THE HOUSEHOLD AND CURRENT TRANSFERS.

FORMULA:-

PERSONAL INCOME = PRIVATE INCOME – CORPORATE TAX – RETAINED EARNING/ SAVING/ UNDISTRIBUTED PROFIT/ CORPORATE SAVING.

RETAINED EARNING:- IT THE PART OF PRIVATE INCOME WHICH IS SAVED BY THE PRIVATE SECTOR TO FACE FUTURE LOSSES.

CORPORATE TAX:- THIS REFERS TO TAX PAYS BY THE COMPANY TO THE GOVT.


PERSONAL DISPOSABLE INCOME(PDY):- IT IS THE INCOME WHICH REMAINS WITH THE HOUSEHOLDS AFTER PAYMENT OF ALL TAXES AGAINST THEIR PROPERTY AND INCOME.

PDY= PERSONAL INCOME- PERSONAL TAX- MISC RECEIPT OF GOVT

OR

PDY= PERSONAL CONSUMPTION EXPENDITURE+ PERSONAL SAVING

MISC RECEIPT OF GOVT:- LIKE FEE PAYMENT, LOAN, EMI ETC.


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