Indian Economy Quiz: GDP and National Income

GDP measures production inside the borders of a country in one accounting year, whoever the producer may be. A foreign firm making cars in India adds to India's GDP, because the test is the place of production and not the nationality of the producer.

Net factor income from abroad is the income residents earn outside the country minus the income foreigners earn inside it.

Machines, buildings and vehicles wear out as they are used, and the value of that wear and tear must be set aside if the country is to keep its capital intact.

He made the earliest estimate of India's national income in the nineteenth century and used it to argue that British rule was draining wealth out of the country, putting the average income at about twenty rupees a person a year.

The committee was appointed in 1949 to prepare official estimates of national income after independence, and it submitted its final report in 1954.

A market price contains the indirect taxes the buyer pays, which never reach the producer, so they must be taken out.

When output of every year is valued at the same fixed set of prices, any change in the total must come from a change in the quantity produced.

The deflator compares what the year's output costs at this year's prices with what the same output would cost at base year prices, so nominal GDP goes on top and real GDP below, and the ratio is expressed as a percentage.

Exports are goods produced at home and sold abroad, so they belong in domestic production. Imports are produced abroad but are already included in the spending of households, firms and government, so they must be taken out to leave only what the country itself produced.

The National Statistical Office, formed by merging the Central Statistical Office with the National Sample Survey Office, prepares the national accounts under the Ministry of Statistics and Programme Implementation.

Per capita income is the average income of a person in a year, found by dividing national income by the entire population, including children and those who do not work.