Net Current Transfer:
Net current transfer refers to the difference between the total current transfers received by a country from abroad and the total current transfers sent by the country to other countries during a specific period. Current transfers are unilateral transfers of value, which do not involve any quid pro quo or exchange of goods and services. They are typically made as gifts, grants, remittances, or aid.

Treatment in Calculating National Income:
In the calculation of national income, net current transfers are an essential component. They are included in the national income accounts to measure the flow of income between countries. The treatment of net current transfers can be explained in the following steps:

1. Definition and Classification:
Net current transfers are classified as a component of the current account in the balance of payments. They are further divided into two categories: inflows and outflows. Inflows refer to transfers received by the country, such as remittances from overseas workers or foreign aid. Outflows, on the other hand, represent transfers sent by the country, including foreign aid provided to other nations.

2. Inclusion in National Income:
Net current transfers are included in the calculation of national income as they represent income received by residents of a country without any corresponding production of goods or services. These transfers contribute to the overall income of the country and have an impact on the standard of living of its residents.

3. Positive and Negative Impact:
Inflows of net current transfers have a positive impact on national income. For example, remittances received by households from family members working abroad increase their disposable income and consumption. Similarly, foreign aid received by the government can be used for investment or social welfare programs, which contribute to economic growth.

Conversely, outflows of net current transfers have a negative impact on national income. When a country provides foreign aid or grants to other nations, it reduces its own available resources for consumption or investment, leading to a decrease in national income.

4. Net Current Transfer Calculation:
To calculate the net current transfer, the total inflows of current transfers are subtracted from the total outflows of current transfers. The resulting figure represents the net amount of transfers received or sent by the country during a specific period.

5. Relationship with Balance of Payments:
The net current transfer is an integral part of the balance of payments. It contributes to the current account balance, which represents the difference between a country's exports and imports of goods, services, and income. Net current transfers, along with net exports of goods and services, net income from abroad, and net capital transfers, determine the overall balance of payments position of a country.

In conclusion, net current transfers play a significant role in the calculation of national income. They represent the unilateral transfers of value received or sent by a country and are included in the national income accounts. These transfers can have both positive and negative impacts on national income, depending on whether they are inflows or outflows. By considering net current transfers, economists can accurately measure the flow of income between countries and assess their impact on the overall economic well-being.