Question

Calculate GDP_MP and National Income from the following information.

S. No.	Items	₹ (in crores)
(a)	Net fixed capital formation	500
(b)	Change in stock	60
(c)	Private final consumption expenditure	2500
(d)	Rent	250
(e)	Interest	200
(f)	Net Indirect Taxes	500
(g)	Net exports	30
(h)	Government final consumption expenditure	700
(i)	Net factor income from abroad	(−)30
(j)	Consumption of fixed capital	120

Answer 1

Calculation of GDP_MP and National Income

Step 1: Calculate GDP at Market Price (GDP_MP)

GDP_MP = Private Final Consumption Expenditure + Government Final Consumption Expenditure + Gross Investment + Net Exports

where Gross Investment = Net Fixed Capital Formation + Change in Stock + Consumption of Fixed Capital

GDP_MP = 2500 + 700 + (500 + 60 + 120) + 30

= 2500 + 700 + 680 + 30

= 3910 crores

Step 2: Calculate National Income (NNP_FC)

NNP_FC = GDPMP − Net Indirect Taxes + Net Factor Income from Abroad − Consumption of Fixed Capital

NNP_FC = 3910 – 500 + (−30) − 120

= 3910 – 500 – 30 – 120

= 3260 crores

GDP_MP = ₹ 3910 crores

National Income (NNP_FC) = ₹ 3260 crores