GROSS MIXED INCOME

By Suparna pani

BY N

GROSS MIXED INCOME

Gross mixed income refers to earning from farming enterprise, sole proprietorships and other professions, such as medical and legal practices. In these professions owners themselves assumes the role of an entrepreneur, financier, worker and landlords.

In other words ,GMI is the income of unincorporated

business These income are the wages, interest on own money, rent

on property and profit from self employment

GDP MEASUREMENT IN INDIA The CSO of India has upgraded the

national income accounting standard for growth estimation in 2015 as global practice

Globally, most accepted and followed national income accounting format is the system of National Accounting (SNA) prepared by UN and ratified by the IMF, World Bank, OEDC and EC

The SNA was launched in 1932 and upgraded in 2008

CHANGES MADE BY CSOThree types of changes were made by CSO in the GDP estimation procedure:

Methodological changes

Changes in the base year

Giving comprehensive coverage to all sector

METHODOLOGICAL CHANGES Methodology is the science of doing something Specifically, there are two methodological changes and both are

interrelated 1. GVA(Gross value added) from different sector will be calculated by

basic prices .GVA for a sector is the sum of expenditure made in that sector

GVA at basic prices=CE+OS/MI+CFC+Production tax less production subsidies

Where CE- Compensation of employee OS-Operating surplus MI-Mixed income CFC-Consumption of fixed capital The above identity says that GVA is the sum of payment made to labor,

surplus of business entity(profit) ,income of self employed(mixed income) and money we keeps to replace the existing machineries(CFC)

contd….. In this way first step in calculating the GDP i.e.,

obtaining sectoral GVA is completed. Now we have to accumulate these sectoral GVA to get GDP. The important theory is that GDP is measure by market price instead of factor price

2. GDP at market price=summation of GVA at basic price+product tax –product subsidies

Actually estimate of GVA at basic price is a step to measure the GDP at market prices. We know that measure GDP,GVA from all the sector of the economy should be cumulated.

Changes in the Base year

Here 2011-12 considered to be a stable year among the available option. Previously ,it was 2004-05

India’s Gross operating surplus and Gross mixed income at current price

2009-42 million 2008-36million 2004-20million

MORE COVERAGE The coverage has been enhanced with

greater representation of manufacturing and financial sectors and this becomes notable change that caused an upward revision of GDP for few years

Comprehensive coverage of financial sector including that of stock brokers,coverages of activities of local bodies etc marks a deviation that seems to have caused the increased in GDP figures.

CONCLUSION Thus ,Gross mixed income is a important

component of GDP measure under income approach

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