Question

Calculate Net Domestic Product at Factor Cost by (a) Income Method, an (b) Production Method from the following data :

	(Items)	(Rs.in crore)
i	Net value Added at market price by primary sector	1,000
ii	Wages and salaries	2,000
iii	Social Security Contribution by Employers	100
iv	Net value added at market price by the secondary sector	600
v	Corporation Tax	30
vi	Retained Earnings of Private Corporations	10
vii	Net value added at market price by the tertiary sector	1,400
viii	Dividend	60
ix	Rent	300
x	Interest	300
xi	Net Indirect Tax	200
xii	Social Security Contribution by Employees	80

Answer 1

(a) By Income Method

Net Domestic Product at Factor Cost (NDP_FC) = Wages and Salaries + Social Security Contribution by Employers + Corporation Tax + Retained Earning of Private Corporations + Dividend + Rent + Interest

=2,000+ 100+30+ 10 + 60+300+ 300 

= Rs. 2,800 crore. 

(b) By Production Method

Net Domestic Product at Factor Cost (NDP_FC) = Net Value Added by Primary Sector + Net Value Added by Secondary Sector + Net Value Added by Tertiary Sector - Net indirect Taxes 

= 1,000 + 600 + 1,400 - 200

= (3,000 - 200) 

= Rs. 2,800 crore