Question

Calculate National Income using Income method and Output method.

	PARTICULARS	(₹ crores)
(i)	Value of output	1200
(ii)	Wages and salaries	165
(iii)	Rent	60
(iv)	Subsidies	15
(v)	Mixed Income of self employed	180
(vi)	Employer's contribution to social security	15
(vii)	Value of intermediate consumption	600
(viii)	Interest	7
(ix)	Factor income earned from abroad	15
(x)	Indirect taxes	90
(xi)	Profits	23
(xii)	Depreciation	75
(xiii)	Factor income paid abroad	30

Answer 1

Income Method:

NDP_FC Compensation to employees + Operating Surplus + Mixed Income

= (165 + 15) + (60 + 7 + 23) + 180

= 450

NNF_FC = NDP_FC + NFIA

= 450 + (−15)

= 435 crores

Output method:

GVA = GDP_MP

= Value of output − Value of Intermediate Consumption

= 1,200 − 600

= 600 crores

NNP_FC = GDP_MP − Depreciation + NFIA − NIT

= 600 − 75 + (−15) − (90 − 15)

= 435 crores

The National Income calculated using the Income method is ₹ 435 crores, while the Output method is also ₹ 435 crores.