Question

Calculate Gross "National Product at Factor Cost by (i) Income Method, and (ii) Expenditure Method, from the following data :

(Items)	(Rs. in crore)
(i) Private Final Consumption Expenditure	800
(ii) Government Final Consumption Expenditure	300
(iii) Compensation of Employees	600
(iv) Net Imports	50
(v) Gross Domestic Capital Formation	150
(vi) Consumption of Fixed Capital	20
(vii) Net Indirect Tax	100
(viii) Net Factor Income from Abroad	(-) 70
(ix) Dividend	150
(x) Rent	120
(xi) Interest	80
(xii) Undistributed Profits	80
(xiii) Social Security Contribution by Employers	60
(xiv) Corporate Tax	50

Answer 1

Income Method 

GNPFC = compensation for employees + Divided + Rent + interest + undistributed profits + corporate tax + consumption of fixed capital + Net factor income from abroad.

= 600 + 150 + 120 + 80 + 80 + 50 + 20 + (-)70

= 1,100 - 70

GNP_FC = Rs. 1,030 crore.

Expenditure Method

GNP_FC = Private final Consumption Expenditure + Government Final.Consumption: Expenditure + Net Factor income from Abroad - Net Imports + Gross Domestic capital formation  - Net indirect taxes

= 800 + 300 + (-70) - (50) + 150 - 100

= 1,250 - 220

GNP_FC = Rs. 1,030 crore.