Private Income

Private income is the income obtained by private individuals from any source, productive or unproductive and the retained income of the corporations.

Definition

According to Central Statistical Organisation, private income is total factor income from all sources and the current transfers from the government and the rest of the world accruing to private sector.

Thus private income includes in both factor income and transfer income. To obtain private income we add (i) current transfer earnings from the govt., (ii) interest on national debt, (iii) net current transfers from the rest of the world, and deduct from national income, (i) property and entrepreneurial income of the govt. departmental enterprises, (ii) savings of non-department undertakings.

Private Income = Income NDP accruing to private sector + Net factor income from abroad + Net transfer payments from the govt. + Transfer payments from the rest of the world + Interest on national debt

Difference Between National Income and Private Income.

1. Income earned both in the public sector and private sector is included in national income. But income earned only in private sector is private income.
2. National income excludes interest on national debt, but private income includes interest on national debt.
3. National income excludes transfer income whereas private income includes current transfers from the govt. and the rest of the world.

Gross National Isposable Income

GNP_MP + Net current transfers from the rest of the World

Net National Disposable Income 

NNP_MP + Net current transfers from the rest of the world.