From the following data relating to an economy, calculate (a) National income using Expenditure Method; (b) National income using Income Method
From the following data relating to an economy, calculate (a) National income using Expenditure Method; (b) National income using Income Method.
| Particulars | ₹ in Crores |
| (i) Government Final Consumption Expenditure | 5,100 |
| (ii) Gross fixed capital formation | 9,029 |
| (iii) Export of goods and services | 2,800 |
| (iv) Net Compensation of employees from abroad | (-) 9 |
| (v) Net property and entrepreneurial income from rest of the world | (-) 316 |
| (vi) Change in Stock | 2,323 |
| (vii) Consumption of fixed capital | 3,023 |
| (viii) Private final consumption expenditure | 42,865 |
| (ix) Import of goods and services | 3,177 |
| (x) Net indirect taxes | 5,168 |
| (xi) Compensation of employees | 17,818 |
| (xii) Operating Surplus | 6,890 |
| (xiii) Mixed income of the self-employed | 26,041 |
Anurag Pathak Changed status to publish December 21, 2023
Solution:-
Calculation of National Income Using Expenditure Method
GDP at MP = Private Final Consumption Expenditure + Government Final Consumption Expenditure + Gross Domestic Capital Formation (Gross Fixed Capital Formation + Change in Stock) + Net Exports (Export of Goods and Services – Import of Goods and Services)
GDP at MP = ₹ 42,865 + ₹ 5,100 + (₹ 9,029 + ₹ 2,323) + (₹ 2,800 – ₹ 3,177)
GDP at MP = ₹ 58940
NNP at FC = GDP at MP – Consumption of fixed Capital + Net Factor income from abroad (Net Compensation of employees from abroad + Net property and entrepreneurial income from rest of the world) – Net indirect taxes
NNP at FC = ₹ 58940 – ₹ 3,023 + [- ₹ 9 + (-) ₹ 316] – 5,168
NNP at FC = ₹ 50,424 Crores
Calculation of National Income Using Income Method
NDP at FC = Compensation of Employees + Mixed income of self-employed + Operating Surplus
NDP at FC = ₹ 17,818 + ₹ 26,041 + ₹ 6,890
NDP at FC = ₹ 50,749
NNP at FC = NDP at FC + Net Factor income from abroad (Net Compensation of employees from abroad + Net property and entrepreneurial income from rest of the world)
NNP at FC = ₹ 50,749 + [- ₹ 9 + (-) ₹ 316]
NNP at FC = ₹ 50,424
Anurag Pathak Changed status to publish November 7, 2023
