Difficulties in Measuring National

Income Value of non-monetised goods and services:-

In India, many goods and services are still exchanged in demonetized form. For example, a person teaching his children and growing fruits and vegetables at home and for consumption. Due to non-valuation of the prices of these non-monetised goods and services and not including them in the national income, the correct assessment of national income is not possible.

Various methods of measuring national income:-

There are many methods of measuring national income, such as product method, income method and expenditure method. The procedures and methods of determining national income through them are also different. There may also be variation inthe national income estimation done by these methods. In such a situation,which method is considered more appropriate becomes a matter of dispute. 

Lack of national income data:-

The lack of sufficient national income data is also a serious problem. Data relating to many goods and services in different sectors of the economy is not included. Data related to the production of many small and cottage industries is not available.

The problem of double counting and the value of intermediate goods:-

A good or service is sold at different stages during the production process.have to pass through, so intermediate goods and double counting related problems arise, because only the prices of final goods and services are included in the national income. 

Problem of Valuation of Stock:-

It is also a very difficult task to make proper valuation of the stock of unsold items at the end of the financial year.Since the monetary value of production of final goods and services made in a financial year is included in the calculation of national income. In such a situation, if there is a stock of some goods left, then the monetary value of those goods is also included in it.

Problem of Evaluation of Depreciation:-

Net National Product can be obtained by deducting depreciation from Gross National Product but the method and rate of depreciation is uncertain,which creates problem in valuation of depreciation.