First Report of the National Income Committee April 1951

The terms of refeence of the committee are to prepare a report on the National Income and related estimates to suggest measures for improving the quality of the available data and for the collection of further essential statistics and to recommend ways and means of promoting research in the field of national income. [...] In the circuit flow of economic activity the same total income can be measured at the point of production as a sum of net outputs arising in the several industrial sectors of the nation's productive system; at the point of flow of incomes as the sum of all incomes in cash in kind and retained by enterprises as net prfit; at the point of final utilisation as the sum of consumers' expenditure [...] It becomes difficult to follow this practice in India not only because of the expense involved and the relative dearth of the technical personnel needed for the purpose but also because of the illiteracy of the majority of the population the semsubsistence character of their economic activity and the general absence of the 12Fire Report : April 1951 13 practice of keeping accounts either amo [...] The area and population covered by this estimate pertains to the whole of the Union of India; and this in turn involves a good deal of processing of statistical material as also the use of a number of assumptions as much of the data available in the field of Indian income relates to the territory and population of India before partition. [...] Consumer expenditure and capital formation; the share of Government in domestic product and expenditure; and the flow of commodities and services across the boundary of the country that is the position of the national economy in relation to the rest of the world are essential items of information for the guidance of economic policy.