Question

Calculate (1) net domestic product at factor cost and (2) gross national disposable income

		(Rs in crores)
1	Private final consumption expenditure	8000
2	Government final consumption expenditure	1000
3	Exports	70
4	Imports	120
5	Consumption of fixed capital	60
6	Gross domestic fixed capital formation	500
7	Change in stock	100
8	Factor income to abroad	40
9	Factor income from abroad	90
10	Indirect taxes	700
11	Subsidies	50
12	Net current transfers to abroad	(-) 30
13

Answer 1

1) NDP_FC = Private final consumption expenditure + Government final consumption expenditure + Gross domestic fixed capital formation + Change in stock + Exports - Imports - Consumption of fixed capital – Net indirect taxes

= 8,000 + 1,000 + 500 + 100 + 70 - 120 - 60 - (700 - 50)

= Rs 8,840 crores

2) Gross National Disposable Income = NDP_FC + Net indirect taxes - Net current transfers to abroad + Factor income from abroad - Factor income to abroad

= 8,840 + (700 - 50) - (-30) + 90 - 40

= Rs 9,579 crores