# What Is The Importance Of Calculating National Income?

Indicator of Economic Conditions:-
From the N.I statistic of a country we know the economic position of a county. If the income of a country is increasing it shows the development of this country and vice versa
It also show whether it is an actual increase or increase in monetary terms. From keeping all these situation such steps can be taken to increase the NI in actual
Indicator Of Standard of Living:-
If we divide the national income of a country over the total population of that country we get per capita income.
Per capita income=   national Income/
Total Population
From the per capita income we can judge the living standard of the people of a country.

Knowledge of Income Distribution:-
The calculation of N.I shows the income distribution in a county. Because the N.I is the aggregate of the wages, salaries, interest, and profit so from the calculation of N.I we know that whether there is more portion of wages or profits.
Does there is equal distribution of wealth or not. How much the portion of income is spent on expenses and how much spent in Investment

Every country makes planning for economic progress. For this purpose countries make development planes which are normally of five years. Planning is not possible with out statistical data of economy.
With out calculation the N.I, it cannot be possible to get statistical data of economy.

International Importance:-
Statistic of N.I also have an international Importance. Like governments International development organizations or banks notice the economic position of the country at the time of advancing loans.
This notification is possible only due to eh calculation of national Income.
If international organizations donate to any country, the portion of donation is based on N.I of the country.
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Various utilities of the national income estimates can be described as below:
1 National income estimates help us to know this performance of an economy during one year and over a period of years.

2 National income estimates also tell us about the economic welfare enjoyed by the people. We can know the per capital income by dividing national income by population.
3 on the basis of national income estimate comparison between various economics of the world may be made. National income figures for various countries provides us the rates of growth in different economies.

4 In an economy, inter-sector comparison can be made with the help of national income statistics
5 national income figures are inevitable for an economy, which wants to develop with the help of economic planning.
6 National income accounts reflect the structural change in a growing economy.
7 National income estimated over period of years enable us evaluate the planning. 8National income estimated are also important in the formation of the budget by the finance Minister of the country.

9 National income estimates are also important because they indicate how the income or wealth is distributed among the various classes. Thus we can know whether the national income is equally distributed or not.
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