Is Expenditure on the construction of a flyover by the government included/excluded in national income?
Is Expenditure on the construction of a flyover by the government included/excluded in national income?
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Yes,
Expenditure on the construction of a flyover by the government will be included in the national income as it is a part of gross domestic capital formation.
Expenditure on the construction of a flyover is part of government fixed investment.
Government fixed investment is part of gross domestic capital formation and it is added to the national income through expenditure method.
National Income = Private Final Consumption Expenditure + Government Final Consumption Expenditure + Gross Domestic Capital Formation + Net Exports + NFIA
Gross Domestic Capital Formation = Gross Fixed Capital Formation + Change in stock
Gross Fixed Capital Formation = Business Fixed Investment + Government Fixed Investment + Fixed Investment by Households on House construction.
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