National Product income has been defined as the value of the net output of goods and services in an economy. The goods and services may be tangible goods like a car, a loaf of bread, etc., or it may take an intangible form such as the service rendered by a doctor, a teacher or a barber.
National income accounts provide a meaningful summary of the working of an economic system in a country. This summary which provides a picture of the current operations and mutual relationship of various sectors of the economic activity in a country is prepared in much the same way as certain financial statements of an individual enterprise are prepared.
There are some conceptual problems or difficulties that crop up when we start measuring the national income of a country, Following are some of the difficulties in measuring national income, Problems of Definition of National Income, Calculation of Depreciation, Value of Inventories, The Treatment of Government, Income from Foreign Firms
The first and foremost importance of national income estimate is that it gives us a correct picture of the structure of the economy, as well as a correct picture of the distribution of income according to regions industrial origin, functional services and persons:
National income portrays itself as national product, national expenditure and national income, National Product, national expenditure and national income thus form a circular flow and make it possible to measure national income in three different ways, namely, as a sum of incomes derived from economic activities