How will you treat the following while estimating National Income of India?

Solution:-

(i) Dividend received by an Indian firm from its investment in shares of a foreign company.

Ans:- Dividend received by an Indian firm would be included in national income of India as it is the part of Factor income from abroad.

(ii) Money received by a family in India from relatives working abroad.

Ans:- Money received by a family in India from relatives working abroad will ‘not be included while estimating National Income, as it is considered a transfer payment as it is merely a remittance from abroad, and no flow of goods or services is involved.

(iii) Interest received on loan given to a friend for purchasing a car.

Ans:- Interest received on loan given to a friend for purchasing a car will ‘not be included’ in the estimation of National Income as loan is given for consumption purposes. loan is not used for production purposes.