Calculate GDP at Factor Cost by Income and Expenditure Method Personal Consumption Expenditure ₹ 730
Solution:-
Calculate GDP at Factor Cost by Income and Expenditure Method
| Particulars | ₹ in Crores |
| (i) Personal Consumption expenditure | 730 |
| (ii) Wages and Salaries | 700 |
| (iii) Employer’s contribution to social security schemes | 100 |
| (iv) Gross business fixed investment | 60 |
| (v) Profit | 100 |
| (vi) Gross residential construction investment | 60 |
| (vii) Government purchases of goods and services | 200 |
| (viii) Gross public investment | 40 |
| (ix) Rent | 50 |
| (x) Inventory Investment | 20 |
| (xi) Exports | 40 |
| (xii) Interest | 50 |
| (xiii) Imports | 20 |
| (xiv) Net Factor income from abroad | (-) 10 |
| (xv) Mixed Income | 100 |
| (xvi) Depreciation | 20 |
| (xvii) Subsidies | 10 |
| (xviii) Indirect taxes | 20 |
Anurag Pathak Changed status to publish December 21, 2023
Solution:-
Calculation of GDP at Factor Cost by Income Method
NDP at FC = Compensation of employees (Wages and Salaries + Employer’s Contribution to social security schemes) + Mixed Income + Rent + Interest + Profit
NDP at FC = ₹ 700 + ₹100 + ₹ 100 + ₹ 50 + ₹ 50 + ₹ 100
NDP at FC = ₹ 1,100
GDP at FC = NDP at FC + Depreciation
GDP at FC = ₹ 1,100 + ₹ 20
GDP at FC = ₹ 1,120 Crores
Calculation of GDP at Factor Cost by Expenditure Method
Gross Domestic Capital Formation = Gross Business Fixed Investment + Gross residential construction investment + Gross public investment + Inventory Investment
Gross Domestic Capital Formation = ₹ 60 + ₹ 60 + ₹ 40 + ₹ 20
Gross Domestic Capital Formation = ₹ 180
GDP at MP = Personal Consumption Expenditure + Government Purchases of goods and services + Gross Domestic Capital Formation + Net Exports (Exports – Imports)
GDP at MP = ₹ 730 + ₹200 + ₹ 180 + (₹ 40 – ₹ 20)
GDP at MP = ₹ 1130
GDP at Factor Cost = GDP at MP – Net Indirect taxes (Indirect taxes – Subsidies)
GDP at Factor Cost = ₹ 1130 – (₹ 20 – ₹ 10)
GDP at Factor Cost = ₹ 1,120 Crores
Anurag Pathak Changed status to publish November 7, 2023
