Question

From the following data calculate, Gross National Product at Factor Cost by (i) Income Method, and (ii) Expenditure Method.

(Items)	(Rs. in crore)
(i) Govemrnent Finai Consumption Expenditure	200
(ii) Private Final Consumption Expenditure	400
(iii) Profits	160
(iv) Net Indirect Taxes	60
(v) Rent	70
(vi) Interest	50
(vii) Compensation of Employees	300
(viii) Exports	65
(ix) Imports	95
(x) Gross Domestic Capital Formation	80
(xi) Consumption of Fixed Capital	10
(xii) Net Factor Income to Abroad	50

Answer 1

lncome Method

GNP_FC = compensation of employees + profit + Rent + interest + consumption of fixed capital - Net Factor Income to abroad 

= 300 + 160 + 70 + 50 + 10 + (- 50)

= 590 - 50

GNP_FC = 540 crore.

Expenditure Method

CNP_FC = Govt, Final Consumption Expenditure + Private Final Consumption + Cross Domestic Capital Formation - Net Factor Income to Abroad - Net lndirect Taxes + Exports - Imports 

= 200 + 400 + 80 - (50) - 60 + 65 - 95 

= [680 + 65] - [50 + 60 + 95]

= [745] - [205]

GNP_FC = Rs. 540 crore.