National income accounting
National income refers to the sum of income earned by all the individuals of a nation in a particular period of time. National income data reveals the total economic performance of the country as a whole. National income represents total receipts, total expenditure and the total value of production. Since a person’s income is another person’s expenditure and each commodity is traded at its market price, national income, national expenditure, and national product are equal. Every country produces goods and services. Therefore, in a particular period of time, the total value of income and expenses incurred during the trading of those goods and services is national income.
NI = Y1+Y2+Y3+……. Yn.
According to Alfred Marshall, “The labor and capital of a country acting upon its natural resources produce annually a certain net aggregate of commodities, material and immaterial including services of all kinds. This is the net annual income or revenue of a country or the national dividend.”
According to Simon Kuznets, “National income is the net output of commodities and services following during the year from the country’s productive system in the hands of the ultimate consumers.”