Question

Calculate national income and GDP_MP by the income method using the following information:

Items	Rs in Crore
(i) Private final consumption expenditure	1300
(ii) Net factor income earned from abroad	50
(iii) Mixed-income of self-employed	500
(iv) Subsidies	100
(v) Indirect tax	200
(vi) Consumption of fixed capital	1000
(vii) Operating surplus	5000
(viii) Compensation of employees	1500

Answer 1

National Income (NNP_FC) = Compensation of Employees + Operating Surplus + Mixed-Income + NFIA

So, NNP_FC = viii + vii + iii + ii

= 1500 + 5000 + 500 + 50 

= 7050

GDP_MP = NNP_FC + Depreciation – NFIA + NIT (Net indirect tax)

8100 = 7050 + 1000 – 50 + 100 

NNP_FC = Rs 7050 

GDP_MP = Rs 8100.