Amritybhav

The previous chapter concluded that economy that we inherited from British was Backward and Stagnant. Agriculture was principle source of subsistence and large percentage of population was facing abject poverty. Life expectancy was extremely low. Now, we will study about Goals and Achievement of Five year plans in India. Let's begin.... Economic Planning A ccording to Planning Commission,"Economic planning means utilisation of country's resources in different development activities in accordance with national priorities. " Economic Planning is a process under which central authorities (like Planning Commission) defines a set of targets to be achieved within a specific period of time,  keeping in view needs and means of the country.  Planning Commission , established in 1950, is the Central Authority of India which formulates India's Five Year Plans among other functions. In India, Prime Minister is the chairperson of Planning Commission.  Note: In February 2015, ...

National Income and product accounts – Data collected and published by Govt. describing the various components of National Income and output in economy. Gross Domestic Product – It is the total market value of a country’s output. It is market value of all final goods and services produced within a given period of time by factors of production located within a country. Intermediate goods : Goods that are processed by one firm for use in further processing by another firm. Value of intermediate goods is not counted in GDP. So, here comes question why are intermediate goods not counted in GDP? Let’s get started, Suppose that in producing a Car, General Motors (GM) pays  Rs. 200 to Goodyear for tires. GM uses these tires to assemble a car, which it sells for Rs. 24,000. The value of car(including tires) is Rs. 24,000 not (Rs.24,000 + Rs. 200). The final price of the car already reflects the value of its components. To count in GDP both the value of tires would result in Double Cou...

What's National Income?  There are answers like, Google says -" the total amount of money earned within a country."   Wikipedia says -" A variety of  measures of national income and output  are used in   economics  to estimate total economic activity in a country or region." Have You Read? What Is Economics? National Income  refers to sum total of factor income earned by normal residents of country during the period of an accounting year.  Domestic Territory  means political frontiers of a country. E.g.- Indian embassy in foreign countries. Normal Residents  refers to an individual or institution who ordinarily resides in a country for a period more than one year and whose  centre of economic interest  lies in that country. E.g.: Foreign people live in India and settled in the country. Factor Income Vs. Transfer Income:  Factor Income refers to income earned by rendering factor services. It is included in Nationa...