Question

Calculate GDP_mp and National Income from the following data:

S.No.	Particulars	₹ (in crores)
(a)	Value of output of primary sector	1000
(b)	Value added of other sectors	250
(c)	Raw materials purchased by primary sector	650
(d)	Raw materials purchased by other sectors	100
(e)	Factor income from abroad	45
(f)	Factor income paid abroad	35
(g)	Depreciation	65
(h)	Indirect taxes	200
(i)	Subsidies	45

Answer 1

1. Calculate Gross value added

`"GVA"_"primary"` = Value of output – Raw materials 

= 1000 – 650

= 350

GDP_mp = `"GVA"_"primary"` + `"GVA"_"others"`

= 350 + 250 

= 600

GDP_mp = (1000 – 650) + (`"VO"_"others"` – 100)

GDP_mp = (1000 – 650) + (250 – 100)

= 350 + 150

= 500

2. Adjust for National Income (NNP_FC)

NFIA = Factor income from abroad – Factor income paid abroad

= 45 – 35

= 10

NIT = Indirect taxes – Subsidies

= 200 – 45

= 155

NNP_FC = GDP_MP – Depreciation + NFIA – NIT

= 500 – 65 + 10 – 155

= 435 + 10 – 155

= 290

∴ The GDP at market price (GDP_MP) is ₹ 600 crores and the National Income (NNP_FC) is ₹ 390 crores.