Question

Estimate national income by :
(a) Expenditure method
(b) Income method from the following data:

ITEMS	Rs.Crores
1. private final consumption expenditure	210
2.Govt final consumption expenditure	50
3. Net domestic capital formation	40
4.Net exports	(-)5
5. Wages and salaries	170
6.Employer's contribution	10
7. Profit	45
8. Interest	20
9.Indirect taxes	30
10. Subsidies	5
11. Rent	10
12. Factor income from abroad	03
13.Consumption of fixed capital	25
14. Royalty	15

Answer 1

National Income (NNP_FC)
Expenditure Method:
(1) + (2) + (3) + (4) = NDP_MP
210 + 50 + 40 + (-5) = Rs. 295
NNP_FC = NDP_MP + Factor Income from Abroad – Net Indirect Tax (Indirect tax subsidy)
= 295 + 3 – (30 – 5)
= 295 + 3 – 25
= 298 – 25 = 273
NNP_FC = Rs. 273 crores
Income Method :
NDP_FC = (5) + (6) + (7) + (8) + (11) + (15)
= 170 + 10 + 45 + 20 + 10 + 15
= 270
NDP_FC = NDP_FC + FIFA
= 270 + 3 = Rs. 273 crores