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Difficulties in Measuring National Income in India

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Difficulties in estimating national income in India are as follows:

Firstly, in India, most of the people are illiterate. They have no idea about the method of keeping accounts.

Secondly, the large non-monetary sector of our economy also stands in the way of the national income estimates. In India, it is very difficult to evaluated goods and services in terms of money. For large portions of the commodities are not sold in the market. They are mostly consumed by the producers.

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Thirdly, another difficulty of estimating national income is that it is hardly possible to find out a common measurable denominator of all economic activities of the Indian people – from the Prime Minister to the ordinary shop keeper.

Fifthly, the adequate statistical date which is helpful in one part of India cannot be used in other parts of the country owing to regional diversities.

Sixthly, there is also the lack proper industrial classification so far as the estimates of national income are concerned. This is due to the fact that the Indian people are engaged simultaneously in different occupational services.

Lastly, in an underdeveloped country like India, the production of agriculture and industry is unorganized. The producers have no through knowledge about the quantity, quality and market value of the products. In most cases, the agriculture sector has hardly and importance in the calculation of national income.

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