Question

How should the following be treated while estimating national income ? Give reasons for your answer.

(i) Festival gift from an employer.

(ii) Rent free house from an employer.

Answer 1

Reasons : 

(i) Festival gift from an employer is not included in the estimation of national income because this is a transfer payment. 

(ii) Rent free house from an employer is included in the estimation of national income because it is a kind of wages in kind and therefore, a part of the compensation of employees.