Calculate National Income by income method and expenditure method Government final consumption expenditure ₹ 100

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Anurag Pathak25.51K November 10, 2023 0 Comments

Calculate National Income by income method and expenditure method.

Particulars	₹ in Crores
(i) Government final consumption expenditure	100
(ii) interest, rent and profits	920
(iii) Gross Capital Formation	620
(iv) Net exports	(-) 10
(v) Change in Stock	100
(vi) Net Factor income from abroad	(-) 10
(vii) Subsidies	20
(viii) Private Final Consumption Expenditure	800
(ix) Indirect tax	120
(x) Consumption of fixed Capital	60
(xi) Mixed income of the self employed	60
(xii) Compensation of employees	370

Ans: National Income = ₹ 1,340 Crores

score 0 · Answer 1 · 2023-11-10T06:55:45+00:00

Solution:-

Calculation of National Income by Income Method

NDP at FC = Compensation of Employees + Mixed Income of Self Employed + Rent, interst and profits

NDP at FC = ₹ 370 + ₹ 60 + ₹ 920

NDP at FC = ₹ 1350 Crores

NNP at FC (National Income) = NDP at FC + Net Factor Income from Abroad

NNP at FC (National Income) = ₹ 1,350 + ₹ (-) 10

NNP at FC (National Income) = ₹ 1340 Crores

Calculation of National Income by Expenditure Method

GDP at MP = Private Final Consumption Expenditure + Government Final Consumption Expenditure + Gross Capital Formation + Net Exports

GDP at MP = ₹ 800 + ₹ 100 + ₹ 620 + ₹ (-) 10

GDP at MP = ₹ 1510 Crores

NNP at FC (National Income) = GDP at MP – Consumption of fixed Capital + Net Factor income from abroad – Net Indirect Tax (Indirect tax – Subsidies)

NNP at FC (National Income) = ₹ 1510 – ₹ 60 + ₹ (-) 10 – (₹ 120 – ₹ 20)

NNP at FC (National Income) = ₹ 1340 Crores