Why are intermediate goods NOT included in the calculation of national income?

Correct option is A

The correct answer is (a) Including intermediate goods would result in double counting.
· Intermediate goods are excluded from the calculation of national income to avoid double counting.
· Including them would count the value of the same goods multiple times as they move through different stages of production.
· National income calculations focus on final goods and services, which represent the total value added at each stage of production without duplicating the value of intermediate goods.
· The total value of goods and services produced by a country in a financial year is known as the National Income of that country.
· Final goods are included in the calculation of national income.
· GDP is the most commonly used measure of national income.
· It represents the total value of all final goods and services produced within a country during a specific time period.
Facts to remember:
· The first effort to calculate India's national income was initiated by Dadabhai Naoroji.
· The initial scientific method for this calculation was proposed by Prof. V.K.R.V. Rao in 1931, although it was considered inadequate.
· The first official attempt was conducted by the National Income Committee under the leadership of Prof. P.C. Mahalanobis in 1949.
· Currently, the Central Statistical Organization (CSO) is tasked with the responsibility of computing national income in India.