From the following data, calculate “National income” by (a) Income Method and (b) Expenditure Method Interest ₹ 150

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Anurag Pathak25.51K November 10, 2023 0 Comments

From the following data, calculate “National income” by (a) Income Method and (b) Expenditure Method:

Particulars	₹ in Crores
(i) Interest	150
(ii) Rent	250
(iii) Government Final Consumption Expenditure	600
(iv) Private Final Consumption Expenditure	1,200
(v) Profits	640
(vi) Compensation of employees	1,000
(vii) Net Factor income to abroad	30
(viii) Net indirect taxes	60
(ix) Net Exports	(-) 40
(x) Consumption of fixed Capital	50
(xi) Net Domestic Capital Formation	340

Ans: (a) ₹ 2,010 Crores; (b) ₹ 2,010 Crores

score 0 · Answer 1 · 2023-11-10T07:38:11+00:00

Solution:-

Calculation of National Income by Income Method

NDP at FC = Compensation of Employees + Mixed Income + Rent + Interest + Profits

NDP at FC = ₹ 1000 + ₹ 0 + ₹ 250 + ₹ 150 + ₹ 640

NDP at FC = ₹ 2040 Crores

NNP at FC = NDP at FC – Net Factor income to abroad

NNP at FC = ₹ 2040 – ₹ 30

NNP at FC = ₹ 2010 Crores

Calculation of National Income by Expenditure Method

NDP at MP = Private Final Consumption Expenditure + Government Final Consumption Expenditure + Net Domestic Capital Formation + Net Exports

NDP at MP = ₹ 1,200 + ₹ 600 + ₹ 340 + ₹ (-) 40

NDP at MP = ₹ 2,100 Crores

NNP at FC = ₹ NDP at MP – Net Factor income from abraod – Net indirect taxes

NNP at FC = ₹ 2,100 – ₹ 30 – ₹ 60

NNP at FC = ₹ 2010 Crores