Let us see some more
difficulties that challenge when we try to assess the national income exactly.
the national income, non-market value is not included since it is not possible
to arrive at the value of the non-market value.
Environmental facts like clean air and water are not and cannot be
assessed in the sense that they are not traded in the market. Let us not confuse here with the bottled
water and a cylinder of oxygen; both of them are marketed and valued at a
price; that is, they are produced at a cost and therefore marketed at a cost.
They are accounted.
usually given is some wild animal in the forest. Though they have value, they
are not traded in the market. They are all therefore non-marketed goods.
There are some
non-market services. Non-market services cover those services provided to the community as a whole free of charge,
or to individual consumers either free of charge or at a fee which is well
below 50 per cent of production costs. Counseling when given free of charge is
a non-market service; coaching when not charged becomes a non-market service.
There are many such services and goods whose value cannot be exactly assessed
nor are they included in the national income as they are not exactly valued. Next comes
Depreciation allowances which are crucial factors when calculating tax that is
payable. It means a certain amount must be excluded from the profit while
calculating tax because the value of some assets used in business would have
come down due to wear and tear for a given period. The depreciation allowances must be deducted
from the national income also; but collecting facts of depreciation allowances
is an enormous task and often it is not possible for the simple reason too many
assets are involved to make the job of collecting facts of depreciation easy
and effective. Likewise, it is also
equally difficult to arrive at the exact figure, the accurate amount to be
deducted from the national income in connection with accidents and repair and
Rent from the
house also can become a matter of discussion whether to be included or not in
the national income. For example, you have been paying Rs 5000 as rent to the
house owner; but when you become the owner of the house, the question comes
whether the rent amount must be included in your income to be included in the
national income. It is said the
discussion appears to continue and no final answer has been arrived at. This adds to the difficulty in arriving at
the national income.
payments like pension and relief allowances cannot be taken in the national
income since they do not generally contribute to current production.
As we saw
earlier, someone who produces a certain product may not market but use it for
his own consumption or he can barter it for some other product. In such circumstances, arriving at the exact
income figure is well-nigh impossible.
national income is measured in terms of money only. The value of money is not
stable. It implies that the national income can and does change without any
change in output. These are the popular reasons that make arriving at the
national income almost impossible.