Formation of States in India - 15 Mints Seminar Notes

INTRODUCTION:

•  Indian comprises of a total 37 states and 8 union Territories. This incorporates constitutional changes brought about the government of India in August 2019. In October 31,2019, the state of Jammu and Kashmir will cease to exist and two new union Territories, UT of Jammu and Kashmir and UT of Ladakh.s
  
• India has 29 states and 8 union territories. The foundation day of each state is celebrated as formation of state and union territories. In some States the formation of states are celebrated as holiday.  

List of formations of states:

Indian States: Andhra Pradesh

Formation Dates/Years: 1 November 1953

Formed By: States Reorganisation Act, 1956

Status Before Foundation: Part of Andhra State and Hyderabad State

Indian States: Arunachal Pradesh

Formation Dates/Years: 20 February 1987    

Formed By: Created as a Union Territory by the North-Eastern Areas (Reorganisation) Act, 1971. Converted to a state by the State of Arunachal Pradesh Act, 1986    

Status Before Foundation: Arunachal Pradesh Union Territory

Indian States: Assam

Formation Dates/Years: 1950

Formed By: Founded as Ahom Kingdom, reorganised as North-East Frontier Province in 1874, Eastern Bengal and Assam in 1905, Assam Province in 1912, achieved statehood in 1950.

Status Before Foundation: Part of Kamarupa Kingdom

Indian States: Bihar

Formation Dates/Years: 1950

Formed By: Founded as Bihar and Orissa Province, reorganised as Bihar Province in 1936, achieved statehood in 1950.

Status Before Foundation: Part of Bengal Province, British India

Indian States: Chhattisgarh

Formation Dates/Years: 1 November 2000

Formed By: The Madhya Pradesh Reorganisation Act, 2000 founded it.

Status Before Foundation: Part of Madhya Pradesh

Indian States: Goa

Formation Dates/Years: 30 May 1987

Formed By: Founded by the State of Goa Act, 1986.

Status Before Foundation: Part of Goa, Daman and Diu

Indian States: Gujarat

Formation Dates/Years: 1 May 1960

Formed By: Founded by the Bombay Reorganisation Act, 1960.

Status Before Foundation: Part of Bombay State

Indian States: Haryana

Formation Dates/Years: 1 November 1966

Formed By: Founded by the Punjab Reorganisation Act, 1966.

Status Before Foundation: Part of East Punjab

Indian States: Himachal Pradesh

Formation Dates/Years: 1971

Formed By: Founded by the Himachal Pradesh (Administration) Order, 1948 as Himachal Pradesh Province, reorganised as Himachal Pradesh (Part C State) in 1950, Himachal Pradesh Union Territory in 1956, achieved statehood in 1971.

Status Before Foundation: Part of the princely states of former Punjab States Agency

Indian States: Jharkhand

Formation Dates/Years: 15 November 2000

Formed By: Founded by the Bihar Reorganisation Act, 2000

Status Before Foundation: Part of Bihar

Indian States: Karnataka

Formation Dates/Years: 1 November 1956

Formed By: Founded by the States Reorganisation Act, 1956 as Mysore State, renamed Karnataka in 1973

Status Before Foundation: Part of Bombay State, Coorg State, Hyderabad State and Mysore State

Indian States: Kerala

Formation Dates/Years: 1 November 1956

Formed By: Founded by the States Reorganisation Act, 1956

Status Before Foundation: Part of Madras State and Travancore-Cochin

Indian States: Madhya Pradesh

Formation Dates/Years: 1 November 1950

Formed By: Achieved statehood in 1950

Status Before Foundation: Part of the Central Provinces and Berar, Princely State of Makrai and the princely states of the former Eastern States Agency

Indian States: Maharashtra

Formation Dates/Years: 1 May 1960

Formed By: Founded by the Bombay Reorganization Act, 1960.

Status Before Foundation: Part of Bombay State

Indian States: Manipur

Formation Dates/Years: 21 January 1972

Formed By: Founded by the North-Eastern Areas (Reorganisation) Act, 1971

Status Before Foundation: Manipur Union Territory

Indian States: Meghalaya

Formation Dates/Years: 21 January 1972

Formed By: Founded by the North-Eastern Areas (Reorganisation) Act, 1971

Status Before Foundation: Part of Assam

Indian States: Mizoram

Formation Dates/Years: 20 February 1987

Formed By: Created as a Union Territory by the North-Eastern Areas (Reorganisation) Act, 1971. Converted to a state by the State of Mizoram Act, 1986

Status Before Foundation: Mizoram Union Territory

Indian States: Nagaland

Formation Dates/Years: 1 December 1963

Formed By: Founded by the State of Nagaland Act, 1962

Status Before Foundation: Nagaland Union Territory

Indian States: Odisha

Formation Dates/Years: 1950

Formed By: Founded as Orissa Province in 1936, achieved statehood in 1950, renamed Odisha on 1st November, 2011.

Status Before Foundation: Part of Bihar and Orissa Province, British India

Indian States: Punjab

Formation Dates/Years: 1947

Formed By: Founded by the Punjab Reorganisation Act, 1966

Status Before Foundation: Part of East Punjab

Indian States: Rajasthan

Formation Dates/Years: 30 March 1949

Formed By: Rajasthan, earlier known as Rajputana, came into existence

Status Before Foundation: Part of the princely states of former Rajputana Agency

Indian States: Sikkim

Formation Dates/Years: 16 May 1975

Formed By: Founded by the Thirty-sixth Amendment of the Constitution of India in 1975

Status Before Foundation: Kingdom of Sikkim

Indian States: Tamil Nadu

Formation Dates/Years: 1 November 1956

Formed By: Founded by the States Reorganisation Act, 1956 as Madras State, renamed Tamil Nadu in 1969

Status Before Foundation: Part of Madras State and Travancore-Cochin

Indian States: Telangana

Formation Dates/Years: 2 June 2014

Formed By: Founded by the Andhra Pradesh Reorganisation Act, 2014

Status Before Foundation: Part of Andhra Pradesh

Indian States: Tripura

Formation Dates/Years: 21 January 1972

Formed By: Founded by the North-Eastern Areas (Reorganisation) Act, 1971

Status Before Foundation: Tripura Union Territory

Indian States: Uttar Pradesh

Formation Dates/Years: 24 January 1950

Formed By: Created as the United Provinces of Agra and Oudh during British rule in 1937 and Achieved statehood as UP in 1950.

Status Before Foundation: United Provinces

Indian States: Uttarakhand

Formation Dates/Years: 9 November 2000

Formed By: Founded by the Uttar Pradesh Reorganisation Act, 2000 as Uttaranchal, renamed Uttarakhand in 2007.

Status Before Foundation: Part of Uttar Pradesh

Indian States: West Bengal

Formation Dates/Years: 1950

Formed By: Achieved statehood in 1950

Status Before Foundation: Part of Bengal Province, British India

Presented by

Devipriya

TNPSC Student

Magme School of Banking

• The invaluable ensemble of 34 caves at Ellora in the Charanandri hills of western India’s Maharashtra State showcases a spirit of co-existence and  religious tolerance through the  outstanding architectural activities carried out by the followers of three prominent religions : Buddhism, Brahmanism, and Jainism.
  
• Ellora Caves which is also known as Ajanta Caves.
  
• Ellora, with its uninterrupted sequence of monuments dating from A.D. 600 to 1000, brings the civilization of ancient India to life.
  

 

• The rock-cut activity was carried out in three phases from the 6th century to the 12th century.
• The earliest caves (caves 1–12), excavated between the 5th and 8th centuries, reflect the Mahayana philosophy of Buddhism then prevalent in this region.
• The Brahmanical group of caves (caves 13–29), including the renowned Kailasa temple (cave 16), was excavated between the 7th and 10th centuries.

 

• The last phase, between the 9th and 12th centuries, saw the excavation of a group of caves (caves 30–34) reflecting Jaina philosophy.     
• Amongst the caves of the Buddhist group, Cave 10 (Visvakarma or Sutar-ki-jhopari, the Carpenter’s cave), Cave 11, and Cave 12 (Teen Tal, or three-storied monastery, the largest in this category) are particularly important.
•  These caves mark the development of the Vajrayana form of Buddhism and represent a host of Buddhist deities.
• The prominent caves of the Brahmanical group are Cave 15 (Dasavatara, or Cave of Ten Incarnations), Cave 16 (Kailasa, the largest monolithic temple), Cave 21 (Ramesvara), and Cave 29 (Dumar Lena).
• Amongst these, Cave 16 is an excellent example of structural innovation, and marks the culmination of rock-cut architecture in India featuring elaborate workmanship and striking proportions.
• The temple is decorated with some of the boldest and finest sculptural compositions to be found in India. The sculpture depicting Ravana attempting to lift Mount Kailasa, the abode of Siva, is especially noteworthy.
• The remains of beautiful paintings belonging to different periods are preserved on the ceilings of the front mandapa (pillared hall) of this temple.
• The Jain group of caves (caves 30 – 34) is exquisitely carved with fine, delicate sculptures, and includes fine paintings dedicated to the Digambara sect.

CONSTRUCTION METHOD:

• The Kailasa Temple is notable for its vertical excavation—carvers started at the top of the original rock and excavated downward.
• The traditional methods were rigidly followed by the master architect which could not have been achieved by excavating from the front.
• A medieval Marathi legend appears to refer to the construction of the Kailasa temple.
• The earliest extant text to mention this legend is Katha-Kalapataru by Krishna Yajnavalki.
• According to this legend, the local king suffered from a severe disease. His queen prayed to the god Ghrishneshwar (Shiva) at Elapura to cure her husband.
• She vowed to construct a temple if her wish was granted, and promised to observe a fast until she could see the shikhara (top) of this temple.
• After the king was cured, she requested him to build a temple immediately, but multiple architects declared that it would take months to build a temple complete with a shikhara.
• One architect named Kokasa assured the king that the queen would be able to see the shikhara of a temple within a week's time. He started building the temple from the top, by carving a rock.
• He was able to finish the shikhara within a week's time, enabling the queen to give up her fast.
• The temple was named Manikeshwar after the queen. M. K. Dhavalikar theorises that Kokasa was indeed the chief architect of the Kailasa temple, which may have been originally known as Manikeshwar.
• Multiple 11th-13th century inscriptions from central India mention architects born in the illustrious family of Kokasa.

 

 

• The Kailasa temple architecture is different from the earlier style prevalent in the Deccan region.
• As stated above, it appears to be based on the Virupaksha Temple at Pattadakal and the Kailasa temple at Kanchi, but it is not an exact imitation of these two temples.
• The southern influence on the temple architecture can be attributed to the involvement of Chalukya and Pallava artists in its construction.
• The indigenous Deccan artisans appear to have played a subordinate role in the temple's construction.
• The entrance to the temple courtyard features a low gopuram.
• Most of the deities at the left of the entrance are Shaivaite (affiliated with Shiva) while on the right hand side the deities are Vaishnavaites (affiliated with Vishnu).
• A two-storeyed gateway opens to reveal a U-shaped courtyard. The dimensions of the courtyard are 82 m x 46 m at the base.
• The courtyard is edged by a columned arcade three stories high. The arcades are punctuated by huge sculpted panels, and alcoves containing enormous sculptures of a variety of deities.

 

• Originally flying bridges of stone connected these galleries to central temple structures, but these have fallen.
• Some of the most famous sculptures are Shiva the ascetic, Shiva the dancer, Shiva being warned by Parvati about the demon Ravana, and river goddess.
• Within the courtyard, there is a central shrine dedicated to Shiva, and an image of his mount Nandi (the sacred bull).
• The central shrine housing the lingam features a flat-roofed mandapa supported by 16 pillars, and a Dravidian shikhara.
• The shrine – complete with pillars, windows, inner and outer rooms, gathering halls, and an enormous stone lingam at its heart – is carved with niches, plasters, windows as well as images of deities, mithunas (erotic male and female figures) and other figures.
• As is traditional in Shiva temples, Nandi sits on a porch in front of the central temple.
• The Nandi mandapa and main Shiva temple are each about 7 metres high, and built on two storeys.
• The lower stories of the Nandi Mandapa are both solid structures, decorated with elaborate illustrative carvings.
• The base of the temple has been carved to suggest that elephants are holding the structure aloft.
• A rock bridge connects the Nandi Mandapa to the porch of the temple. The base of the temple hall features scenes from Mahabharata and Ramayanam.

RAMAYANAM PANEL    

 

• The labors worked for around 16 hours a day. Since there was no electricity in those days they used mirrors to reflect the light inside the cave as even today it is quite dark inside.
• The unique way in which the sculptors drilled the holes is one of the biggest mystery for everyone. The holes indicate that someone very small drilled it as a human being cannot enter and do the drilling.
• More than 7,000 labors worked for around 150 years to carve the Kailasha Temple.
• It simply indicates that the amount of work put by every labor is mammoth and unsurpassable even today.
• Archaeologists believe that the sculptors scooped out more than four tons of rock to build the awesome Kailasha Temple construction.
• Even today, it is impossible to accomplish such a task using the largest ever-available 10-ton JCB machines.
• Dhwajasthamba is a famous rock pillar which is equally intriguing.
• There is an interesting tale about the Kailasa Temple of Ellora.
• Mughal King Aurangzeb who destroyed thousands of Hindu temple, also tried to destroy Kailasa temple.
• It is said that 1000 people were sent to destroy the temple in the year 1682.
• They worked for 3 years but they could break and disfigure a few statues only.
• Aurangzeb finally gave up on this task and realizing that it was impossible to completely destroy the temple as the rock was simply too hard to demolish, even though artisans used only hammers, chisels and picks to construct it.

BUILT  BY  SINGLE  ROCK  MOUNTAIN  FROM  TOP (KAILASH TEMPLE)

Presented by

R S Sathish

TNPSC Student

Magme School of Banking

Borders in India - 15 Mints Seminar Notes

India shares borders with several sovereign countries

Land borders  - China , Bhutan , Nepal , Pakistan , Afghanistan , Bangladesh , Myanmar.

Both land and maritime borders – Bangladesh & Pakistan.

Only maritime –  Srilanka.

India’s Andaman &  Nicobar  island shares maritime border with Thailand , Myanmar , Indonesia.

COUNTRY        LENGTH OF BORDERS

Bangladesh:    4096.7 km

China:        3488 km

Pakistan:        3323 km

Nepal:        1751 km

Myanmar:        1643 km

Bhutan:        699 km

Afghanistan:    106 km

Total land border – 15,106.7 km

Longest border between – Bangladesh &  India.

Shortest border between – Afghanistan & India.

INDIA –PAKISTAN BORDERS

• Total length : 3323 km

• Border touching states :

1. Jammu and Kashmir -1222 km

2. Rajasthan – 1170 km

3. Gujarat - 506 km

4. Punjab – 425 km

LOC – line of control

POK -  Pakistan occupied Kashmir

• International border name:

Radcliffe line and LOC

Radcliffe line was drawn by Sir Cyril Radcliffe between india and Pakistan on 17th august in 1947 during  the partion of india .

LOC (the line of control) seperates  Jammu and Kashmir of India from POK. This line was formally established in the year 1972 after the Simla agreement . LOC is 740 km long.

INDIA – AFGHANISTAN BORDER

Total length : 106 km

India shares smallest border with Afghanistan. There is just 106 km border length between india and Afghanistan .

Only jammu and Kashmir touches Afghanistan border but due to POK ( Pakistan occupied Kashmir) india has no effective border with Afghanistan .

Durand line is the international boundary line between Pakistan and Afghanistan . Durand line was drawn by sir Mortimer Durand in the year 1896.

INDIA – CHINA BORDER

Total length : 3488 km

Border sharing states :

1. Jammu and Kashmir – 1597 km

2. Arunachal Pradesh – 1126 km

3. Uttarakhand – 345 km

4. Sikkim  - 220 km

5. Himachal Pradesh – 200 km

McMahon line is the international boundary line between India and China. This line was demarcated by Henry McMahon in the year 1914 at Simla convention.

The Line of Actual Control or LAC is an effective boundary line which seperates the Indian administrative areas of Jammu and Kashmir from Aksai Chin. this line was drawn in 1962 after Indo-China war .

INDIA – NEPAL BORDER

• Border length – 1751 km

• Border sharing states :

1. Uttar pradesh – 651 km

2. Bihar – 601 km

3. Uttarakhand – 303 km

4. Sikkim – 97.8 km

5. West Bengal – 96 km

India – Nepal border is an open international border between India and Nepal. Because the people of these both countries can cross the boundary line from any point.

Nepal is the only country where Indian can go without passport and visa.

INDIA – BHUTAN BORDER

• Border length – 699 km

• Border sharing states:

1. Assam – 267 km

2. Arunachal Pradesh  - 217 km

3. West Bengal – 183 km

4.  Sikkim – 32 km

India – Bhutan border Is an open international border just like India – Nepal border.

INDIA – BANGLADESH BORDER

• Border length – 4096.7 km

• Border sharing states :

1. West Bengal – 2216.7 km

2. Tripura – 856 km

3. Meghalaya  - 443 km

4. Mizoram – 318 km

5. Assam – 263 km

India shares longest border with Bangladesh There is 4096.7 km long international border between these two countries.

INDIA – MYANMAR BORDER

• Border length – 1643 km

• Border sharing states:

1. Arunachal Pradesh – 520 km

2. Mizoram – 510 km

3. Manipur – 398 km

4. Nagaland – 215 km

COUNTRY             BORDER LINE

Radcliffe  line:     India and Pakistan

Durand  line:       Pakistan and Afghanistan

McMahon  line:    India and china

38th parallel:      South & North Korea

31st parallel:      Iran and Iraq

49th parallel:      USA Canada

Hindenburg  line:    France and Germany.

Presented by

Jaisurya

TNPSC Student

Magme School of Banking

Biodiversity - 15 Mints Seminar Notes

Bios – Life, Diversity – Variety ( Forms)

Biodiversity refers to every living thing, including plants, bacteria, animals, and humans which found on this planet including along with geographical location and also which maintain the balance of nature and also which is combined on all type of living organisms.

Term biological diversity was coined by Walter G Rosen in 1985 From that the term biodiversity was applied by Sociobiologist - professor

Edward O Wilson – 1992

•    1916 – The term biological diversity was used first by J. Arthur Harris

•    1974 – The term natural diversity was introduced by John Terborgb

•    Number of ant species 20000

•    Number of Beetle species 3 lacs

•    Number of Fish species 28000

•    70% of species are animals

•    22% of species are plants

•    8/10 of inspects

Important forms of biodiversity

•    Genetic diversity

•    Species diversity

•    Ecological diversity

Genetic Diversity :

• It classifies types of genes as well as chromosome present in different species.  Variations of genes found with in the species is called genetic diversity.
  
• More than 50,000 varieties of rice
  

Species diversity:

Western Ghats have ever greater amphibians species diversity than Eastern Ghats. Where varieties of species within a region for example

Tiger - Panther tigress

Lion - Panther Leo

Snow leopard - Panther Unisia

Here Panther is the Gene ( same family)  and the species are different.

Ecological diversity:

Biotic component interaction with abiotic component ( living components with non living components) are ecological diversity

Terrestrial ecosystem – Forest, Desert

Aquatic ecosystem – Freshwater, Marine water

Three types:

Alpha, Beta, Gamma ( Whittaker – 1965)

Alpha - total no of species

Beta - Comparison

Gamma – Large region measure

Major Role of Biodiversity:

Ecosystem : Nutrient recycling, energy transfer, climate stability, pollutant breakdown, balance of atmospheric gases.

Biological importance : Food, Medical products, Para Medical drugs, Wood products, Breeding stocks.

Social biodiversity : Education, Research, Cultural values, Tourism,

Cause of losses :

Natural – Flood,  Earthquake, Landslides

Man made – Deforestation, Habitated Distruction, Pollutilation. 

Presented by

Sabeha

TNPSC Student

Magme School of Banking

GDP, GNP, NDP, NNP - 15 Mints Seminar Notes

Income is that the most often used term in social science. financial gain level is that the most great tool that is employed to work out the quality of living of the individuals in an exceedingly Country. Actual that means of value is value of all final merchandise and services created by the residents of a rustic. To calculate web national product, depreciation of plant and machinery utilized in the assembly method is subtracted.

National income is calculated for a specific amount, ordinarily a year (In India, year means that Gregorian calendar month one to March thirty one of next year). web issue financial gain from abroad is more to the domestic product to urge the worth of value.

National Income = C + I + G + (X – M)

Where,

C = Total consumption expenditure

I = Total investment expenditure

G = Total government expenditure

X – M = Export - Import

Different ideas of value

Gross Domestic Product (GDP)

Gross domestic product is that the price of all final merchandise and services created among the boundary of a nation throughout one year. In India one year means that from first Gregorian calendar month to thirty first March of consecutive year.

GDP calculation includes financial gain of foreigners in an exceedingly Country however excludes financial gain of these those that live outside of that country.

Net Domestic Product (NDP)

NDP is calculated by deducting the depreciation of plant and Machinery from GDP.

NDP = Gross Domestic Product - Depreciation

Gross National Product (GNP)

GNP is that the price of all final merchandise and services created by the residents of a rustic in an exceedingly year (i.e., first Gregorian calendar month to thirty first March of consecutive year in India).

While scheming value, financial gain of foreigners in an exceedingly country is excluded however financial gain of individuals UN agency live outside of that country is enclosed. the worth of value is calculated on the idea of GDP.

GNP = GDP + X - M

Where,

X = financial gain of the individuals of a rustic UN agency live outside of the Country

M = financial gain of the foreigners in an exceedingly country

Net National Product (NNP)

Net National Product (NNP) in Associate in Nursing economy is that the value once deducting the loss because of depreciation.

NNP = value - Depreciation

NNP at issue Cost:

It is the worth of NNP once the worth of products and services is taken at the assembly price.

NNP at Market Price:

It is the worth of NNP at client price.

NNP at market price = NNP at issue price + Indirect taxes – Subsidies Inflation

Inflation means that growth of cash or increase in offer of cash within the economy. Actual that means of inflation is increase in finances quicker than the expansion in real value.

In inflation finances will increase quicker than the demand of cash within the market, therefore cash loses its price because of oversupply of cash and this causes rise in value.

Reason behind Inflation

In developed countries, growth of cash offer is that the most vital reason of inflation. however in developing countries like India, financial reason is one among the explanations.

Some additional vital reasons are:

The most common reason of inflation altogether kinds of Economy is Deficit finance. the govt. of a rustic tries to grow the Economy of its country and spends additional for this cause. As a result the method finishes up acquisition deficit finance.

When public expenditure will increase however the availability of products doesn't then the inflationary value rises within the economy.

One of the explanations of inflation is quick growing population in an exceedingly country.

The large flow of foreign currency in an exceedingly country is additionally a vital reason of inflation. particularly once the flow is quicker than the absorption capability of the economy of a rustic then the inflationary downside arises.

When per capita financial gain will increase then demand of varied merchandise within the market additionally will increase and it additionally becomes one among the explanations of inflationary issues.

Presented by,

Bhuvanesh 

Banking Student

Magme School of Banking

KYC (Know Your Customer) - 15 Mints Seminar Notes

Know Your Customer Know Your Customer is today a significant element in the fight against financial crime and money laundering, and customer identification is the most critical aspect as it is the first step to better perform in the other stages of the process.

TWO COMPONENTS:

•    Identity

•    Address

IDENTITY:       

KYC procedures defined by banks involve all the necessary actions to ensure their customers are real, assess, and monitor risks.
These client-onboarding processes help prevent and identify money laundering, terrorism financing, and other illegal corruption schemes.

ADDRESS:

KYC process includes ID card verification, face verification, document verification such as utility bills as proof of address, and biometric verification.

Banks must comply with KYC regulations and anti-money laundering regulations to limit fraud. KYC compliance responsibility rests with the banks.

KYC documents:

KYC checks are done through an independent and reliable source of documents, data, or information. Each client is required to provide credentials to prove identity and address.

In May 2018, the U.S. Financial Crimes Enforcement Network (FinCEN) - added a new requirement for banks to verify the identity of natural persons of legal entity customers who own, control and profit from companies when those organizations open accounts.

Bottom line:

when a corporate company opens a new account, it will have to provide Social Security numbers and copies of a photo ID and passports for their employees, board members, and shareholders.

eKYC
Electronic know your customer:

In India, Electronic Know Your Customer or Electronic Know your Client or eKYC is a process wherein the customer's identity and address are verified electronically through Aadhaar authentication. Aadhaar is India's national biometric eID scheme.

eKYC also refers to capturing information from IDs (OCR mode), the          extraction of digital data from government-issued smart IDs (with a chip) with a physical presence, or the use of certified digital identities and facial recognition for online identity verification. 

Presented by

Prathima

Banking Student 

Magme School of Banking

National Income - 15 Mints Seminar Notes

National income means the value of goods and services produced by a country during a financial year. Thus, it is the net result of all economic activities of any country during a period of one year and is valued in terms of money. National income is an uncertain term and is often used interchangeably with the national dividend, national output, and national expenditure. We can understand this concept by understanding the national income definition.

Concept of National Income

The National Income is the total amount of income accruing to a country from economic activities in a years time. It includes payments made to all resources either in the form of wages, interest, rent, and profits.

The progress of a country can be determined by the growth of the national income of the country

National Income Definition

There are two National Income Definition

•    Traditional Definition

•    Modern Definition

Traditional Definition

According to Marshall: “The labor and capital of a country acting on its natural resources produce annually a certain net aggregate of commodities, material and immaterial including services of all kinds. This is the true net annual income or revenue of the country or national dividend.”

The definition as laid down by Marshall is being criticized on the following grounds.

Due to the varied category of goods and services, a correct estimation is very difficult.

There is a chance of double counting, hence National Income cannot be estimated correctly.

For example, a product runs in the supply from the producer to distributor to wholesaler to retailer and then to the ultimate consumer. If on every movement commodity is taken into consideration then the value of National Income increases.

Also, one other reason is that there are products which are produced but not marketed.

For example, In an agriculture-oriented country like India, there are commodities which though produced but are kept for self-consumption or exchanged with other commodities. Thus there can be an underestimation of National Income.

Simon Kuznets defines national income as “the net output of commodities and services flowing during the year from the country’s productive system in the hands of the ultimate consumers.”

Following are the Modern National Income definition

•    GDP
•    GNP

Gross Domestic Product

The total value of goods produced and services rendered within a country during a year is its Gross Domestic Product.

Further, GDP is calculated at market price and is defined as GDP at market prices. Different constituents of GDP are:

1.    Wages and salaries
2.    Rent
3.    Interest
4.    Undistributed profits
5.    Mixed-income
6.    Direct taxes
7.    Dividend
8.    Depreciation

Gross National Product

For calculation of GNP, we need to collect and assess the data from all productive activities, such as agricultural produce, wood, minerals, commodities, the contributions to production by transport, communications, insurance companies, professions such (as lawyers, doctors, teachers, etc). at market prices.

It also includes net income arising in a country from abroad. Four main constituents of GNP are:

1.    Consumer goods and services

2.    Gross private domestic income

3.    Goods produced or services rendered

4.    Income arising from abroad.

GDP and GNP on the basis of Market Price and Factor Cost

a) Market Price

The Actual transacted price including indirect taxes such as GST, Customs duty etc. Such taxes tend to raise the prices of goods and services in the economy.

b) Factor Cost

It Includes the cost of factors of production e.g. interest on capital, wages to labor, rent for land profit to the stakeholders. Thus services provided by service providers and goods sold by the producer is equal to revenue price.

Alternatively,

Revenue Price (or Factor Cost) = Market Price (net of) Net Indirect Taxes

Net Indirect Taxes = Indirect Taxes Net of Subsidies received

Hence,

Factor Cost  shall be equal to

(Market Price) LESS (Indirect Taxes ADD Subsidies)

Net Domestic Product

The net output of the country’s economy during a year is its NDP. During the year a country’s capital assets are subject to wear and tear due to its use or can become obsolete.

Hence, we deduct a percentage of such investment from the GDP to arrive at NDP.

So NDP=GDP at factor cost LESS Depreciation.

The Accumulation of all factors of income earned by residents of a country and includes income earned from the county as well as from abroad. Thus, National Income at Factor Cost  shall be equal to

NNP at Market Price LESS (Indirect Taxes ADD Subsidies)

Presented by,

Deekshitha

Banking Students

Magme School of Banking