Which of the following is equivalent to National Income?

National Income is formally defined as the Net National Product at factor cost (NNPFC). It represents the total income earned by the factors of production (land, labor, capital, and entrepreneurship) belonging to a country during a specific year [2]. To derive National Income from market price aggregates, one must subtract depreciation from the Gross National Product (GNP) to obtain Net National Product (NNP), and then adjust for taxes and subsidies [5]. Specifically, NNP at factor cost is calculated by subtracting net indirect taxes (indirect taxes minus subsidies) from NNP at market prices [4]. This measure excludes the consumption of fixed capital (depreciation) and focuses on the actual income accruing to residents, whether earned domestically or abroad [2][t1]. While GDP measures output within domestic borders, National Income (NNPFC) accounts for net factor income from abroad (NFIA) and reflects the true earning of a nation's citizens [c5][t2].

Sources

1. [1] Macroeconomics (NCERT class XII 2025 ed.) > Chapter 2: National Income Accounting > National Disposable Income and Private Income > p. 28
2. [2] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 1: National Income > Eight (08) Measures or Aggregates of National Income: 1. GDP extsubscript{MP} = Gross Domestic Product at Market Price. 2. GDP_ extsubscript{FC} = Gross Domestic Product at Factor Cost = GDP_ extsubscript{MP} – Indirect taxes + Subsidies 3. NDP extsubscript{MP} = Net Domestic Product at Market Price = GDP_ extsubscript{MP} – Depreciation 4. NDP_ extsubscript{FC} = Net Domestic Product at Factor Cost = NDP_ extsubscript{MP} – Indirect taxes + Subsidies 5. GNP extsubscript{MP} = Gross National Product at Market Price = GDP_ extsubscript{MP} + NFIA 6 > p. 9
3. [4] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 1: Fundamentals of Macro Economy > 1.11 Macroeconomic Variables > p. 16
4. [5] https://mmccollege.ac.in/uploads/1758111984_2nationalincome.pdf