Uses of National Income Statistics

Let us now discuss the uses of national income statistics in this section. These are as below:

1. National income figures support governments in preparation, policy making, preparation of budgets and estimating the level of economic activity.

2. Formulation of Economic Policies: National income statistics are valued instruments of economic analysis and a controller to economic strategies to be followed. It is more useful in context of planning and formulation of accurate plans.

3. Studying Economic Structure: It gives an idea of the structure of the economy. It benefits to make inter-sectoral contrasts and to study the rate of development of the economy. The development of national income is a key of the growth of the creative capacity of an economy.

4. Inter-sectoral Comparisons: It supports to study inter-sectoral growth. Such associations are useful. Share of numerous sectors can be calculated to find out structural defects and faults of the economy.

5. Indicator of Economic Welfare: It enables us to study per capita income or per capita drinking which are overall displays of economic growth. But it is not co-operative in revealing distribution of income in the society.

6. Making International Comparisons: National income approximations allow us to mark international comparisons and standard of living of people.

7. Contribution to International Institutions: It displays the capability of a republic to bear certain common weight of global institutions like the U.N.O.

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