National income is the new value of the aggregate social product created in kind in the sphere of material production during the year. In this case, the number of goods created in the country is calculated, and then the costs that domestic enterprises incurred during the reporting period are deducted from the estimate from this amount. In kind, national income includes the entire mass of the means of production and commodities produced per year. This indicator is a measure of economic growth in the country, and it is used by the government in calculating the budget for next year, as well as for analytics and the development of new development strategies.
Story
National income as a special term was first introduced by Karl Marx, because before him Western economic thought did not consider the criteria of social reproduction. Previously, physiocrats, including Renee, were engaged in a similar problem, but when constructing the "Economic Table" they took into account only agriculture, so the analysis of the number of products remained inaccurate.
D. Ricardo and A. Smith did not take into account the cost of the means of production at all, therefore, in their works only the amount of income received by the owners of enterprises was estimated, without taking into account the costs incurred by them. In the twentieth century, bourgeois economists included in this indicator not only the profit received from the manufacturing sector, but also the work of other sectors - educational institutions, public administration and defense, and health care; therefore, the indicator of economic development artificially increased by 20-30%.
In socialist countries, the concept of “national wealth” is introduced for the first time, including not only an increase in productive forces, but also natural resources, as well as other material and spiritual values. In monetary terms, this macroeconomic indicator represents the value of all assets valued at the market price that are owned by the state and its residents.
In Russia
In Russia, unlike Western countries, national income still covers only the cost of material production, therefore this macroeconomic indicator does not take into account income derived from other industries. So, it does not include scientific developments, income derived from exchange transactions, and the profit of private medical institutions.
The approaches
Modern economists use several different approaches when calculating this indicator. The first of them is based on the total income received from economic activity, and takes into account the salaries of citizens, as well as the receipt of rents and dividends by residents. However, this amount is then allocated to payments to households, business owners and fiscal authorities. The second approach is based on the calculation of production, while taking into account the added total value of all goods produced by sectors of the economy.
Structure
Net national income is currently calculated using a special formula. First, the primary amounts received by residents of the state during the reporting period are taken into account , and then the value of assets transferred abroad in cash or in kind is subtracted from them. From the obtained indicator, economists can only deduct the costs of manufacturers for depreciation of equipment. The general structure includes the volume of gross and net products, as well as the wages of citizens, as the most important component of national income.