Structure of Indian Economy

The capital output ratio is used to produce an output over a period of time. This ratio has a tendency to be high when capital is cheap as compared to other inputs. For instance, a country with abundant natural resources can use its resources in lieu of capital to boost its output. Hence, the resulting capital output ratio is low.

MAT or Minimum Alternative Tax was introduced in the budget of 1996-97. Under MAT, a company is required to pay a minimum tax of 7% of the book profit in case the tax on the total income computed under the normal provisions of law works out to be less than this amount.

Progressive taxation is a process in which, when the income of a person increases, rate of income tax on the income also goes up. Regressive taxation is the process according to which, when the income of a person goes up, rate of tax goes down. A progressive tax structure improves the distribution of income.

Per Capita Real Income is nothing but NNP at factor cost. It means national income is sum total of all factor incomes adjusted for increase in prices.

The share of the tertiary sector in the total GDP or Gross Domestic Product of India is increasing, which is a sign of economic development. This reproduces the trend shown by western countries as they were developing.

National Income is the money value of all final goods and services produced in an economy during a financial year. At the level of an economy, value of final goods and services is equal to the total income of all factors of production viz. labour, capital, land and entrepreneurship.