1.14         ndian    onom
     In the last decade (2003–04 to 2012–13), growth
                                                                thE iDEa of national incomE
     has increasingly come from the services sector,11
     in which contribution to overall growth of the         Income is probably the most frequently used
     economy has been 65 per cent, while that of the        term in economics, used by experts and lay men.
     industrial and agricultural sectors have been 27       Income level is the most commonly used tool
     per cent and 8 per cent, respectively.                 to determine the well-being and happiness of
                                                            nations and their citizens. This remains true even
          By the end of the 19th century, it was a          today, Even if we know that ‘income’ is not an
     well-established fact, at least in the western         exhaustive idea to know about the well-being
     world, that industrial activities were a faster        of the society. There has been some reason for
     way to earn income in comparison to agrarian           such a perception about the concept of income.
     activities. The Second World War had                   Basically, when the idea of ‘human development’
     established the fact for the whole world—and           came into being in the early 1990s, the concept
     almost every country started their preparation         of the ‘human development index’ ultimately
     for the process of industrialisation. As country       was heavily dependent on the level of ‘income’
     after country successfully industrialised, a           of an individual in a country. Education and
                                                            life expectancy can only be enhanced once the
     pattern of population shift occured from one
                                                            required amount of ‘investment’ (expenditure
     to another sector of the economy, which was
                                                            on them) could be mobilised. Thus, somehow,
     known as the stages of growth of an economy.12         income came to be established as the ‘focal point’
     With the intensification of industrialisation,         of ‘development/human dvelopment’.
     dependency on the primary sector for livelihood              As income of a single person can be measured,
     decreased and dependency on the secondary              it can be measured for a nation and the whole world,
     sector increased consistently. Similarly, such         although the method of calculation (accounting)
     economies saw a population shift from the              may be a little bit complex in the latter’s case. In
     secondary to the tertiary sector—and these             due course, four ideas/ways to calculate the income
     were known as the ‘post-industrial’ societies          of a nation13 developed, which are the subject
     or the services societies. Almost the whole            matter of the ‘national income accounting’. These
     Euro-America falls under this category—these           four ways to calculate the ‘income’ of an economy,
                                                            although different from each other in some ways,
     economies are having over 50 per cent of their
                                                            are the concepts of GDP, NDP, GNP and NNP.
     total produce value being contributed by the
                                                            All are a form of the national income, but are
     tertiary sector and over half of the population        different from one another. They all present a
     depends on this sector for their livelihood.           different story about the income of a nation in
     Many other countries which started the process         their own specific way. Here, we will objectively
     of industrialisation in the post-war period did        discuss each one of them.
     show aberrations in this shift of the population
                                                               13.  The discussion on National Income Accounting is
     and the income—India being one among them.                     based on several textbooks of economics and the
                                                                    documents released by the International Monetary
       11.  Ministry of Finance, Economic Survey 2012–13,           Fund (IMF) and the World Bank (WB) in the areas
            Government of India, New Delhi, 2013, p. 30             of Comparative Economics and International
       12.  Walt W. Rostow, The Stages of Economic Growth:          Economics. It was Simon Kuznets, a Nobel Prize
            A Non-Communist Manifesto, Cambridge University         winning economist from the SA who first conceived
            Press, London, 1960, pp. 1–5.                           the idea of GDP in 1934.