Is payment of interest on borrowings by general government included/excluded in national income?
Is payment of interest on borrowings by general government included/excluded in national income?
Anurag Pathak Changed status to publish December 9, 2023
No,
It will not be included in national income because it is a non-factor payment as the general government borrows only for consumption purposes.
Explanation:-
Borrowing by the general government is used only for consumption purposes.
It does not add to the current flow of goods and services.
Thus, the interest payment of borrowings used for consumption purposes is not included in the national income.
Anurag Pathak Changed status to publish December 9, 2023
