Gross Domestic Product etc - 25

Concepts and Definitions

3.4 The estimates of State Income can conceptually be prepared by
adopting two approaches, namely, income originating and income accruing.
Income originating approach

3.5 In the Income originating approach, the measurement corresponds to
income originating to the factors of production physically located within the
geographical boundaries of state and represents net value of goods and
services produced within the state. It is the income originating as a result of
the utilization of the physical assets and the labour force in the region, even
though some of the income might flow to residents outside the region. The
State DESs presently compile estimates of SDP/DDP following the income
originating approach, due to lack of requisite data needed for compiling these
estimates by following the income accruing approach. Thus the current
concept of compiling the GSDP/NSDP is similar to that of compiling the
GDP/NDP of the entire economy i.e., measuring the volume in monetary
terms, the total value of goods and services produced within the geographical
boundary of the state.[Reproduced from CSO Publication]