Meaning and Definition

1] Dr Alfred Marshall

“The labour 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 of a country or national dividend”.

According to Dr Alfred Marshall, the word ‘net’ refers to the amount calculated after deducting depreciation.

Dr Alfred Marshall definition represents the total value of production — it is from the production end.

2] Prof Arthur Cecil Pigou

“National income is that part of objective income of the community including of course income earned from abroad which can be measured in terms of money. Prof Arthur Cecil Pigou’s definition includes all receipts from abroad.

National income represents the total value of production — it is from the production end and.

3] According to Prof. Fisher,

“The national income or dividend consists solely of services as received by ultimate consumers whether from their material or human environments.”

This definition of national income is from the consumption point of view.

4] According to Paul Samuelson

National income is the final figure you arrive at when you apply the measuring rod of money to diverse apples, oranges and machines that a society produces with its land, labour and capital resources. He adds “it is the loose name we give to the money measure of the overall annual flow of goods and services in an economy.

5] According to National Income Committee of India, [NIC] 1951,

“A national income estimate measures the volume of commodities and services turned out during a given period and counted without duplication.”

6] According to Simon Kuznets,

“The net output of commodities and services flowing during a given year from a country’s productive system in the hands of the ultimate consumer”.


Posted in General Economics