How will you treat the following while estimating National income of India? Give reasons for your answer.
How will you treat the following while estimating National income of India? Give reasons for your answer.
(i) Dividend received by a foreigner from investment in share of an Indian company.
(ii) Profits earned by a branch of an Indian bank in Canada.
(iii) Scholarship given to Indian students studying in India by a foreign company.
Anurag Pathak Changed status to publish November 22, 2023
Solution:-
(i) Dividend received by a foreigner from investment in share of an Indian company
Ans:- Dividend received by a foreigner from investment in shares of an Indian company ‘will be deducted from National Income as it is factor income to abroad.
(ii) Profits earned by a branch of an Indian bank in Canada
Ans:- Profits earned by a branch of Indian bank in Canada is factor income received from abroad. It is included in National Income.
(iii) Scholarship given to Indian students studying in India by a foreign company
Ans:- Scholarship given to Indian students studying in India by a foreign firm will ‘not be included’ while estimating National Income, as it a transfer payment.
Anurag Pathak Changed status to publish November 22, 2023
