Question

From the data given below, calculate Gross Domestic Product at market prices and National Income (NNP_FC) using the Value Added Method:

	(₹ in crore)
(i) Gross value of output in primary sector (at factor cost)	950
(ii) Gross value of output in secondary sector (at factor cost)	470
(iii) Gross value of output in tertiary sector (at factor cost)	500
(iv) Value of intermediate products in primary sector	360
(v) Value of intermediate products in secondary sector	200
(vi) Value of intermediate products in tertiary sector	175
(vii) Depreciation	20
(viii) Indirect tax	35
(ix) Subsidy	10
(x) Net factor income from abroad	4

Answer 1

Given Data (₹ in crore):

Gross Value of Output (at factor cost): Primary Sector = ₹ 950, Secondary Sector = ₹ 470, Tertiary Sector = ₹ 500

Intermediate Products (Consumption): Primary = ₹ 360, Secondary = ₹ 200, Tertiary = ₹ 175

Depreciation = ₹ 20

Indirect Tax = ₹ 35

Subsidy = ₹ 10

Net Factor Income from Abroad = ₹ 4

GVA at Factor Cost (GVA_FC) = Total Gross Value of Output – Total Intermediate Consumption

= (₹ 950 + ₹ 470 + ₹ 500) – (₹ 360 + ₹ 200 + ₹ 175)

= ₹ 1,920 – ₹ 735

= ₹ 1,185 crore

Net Indirect Taxes = Indirect Taxes – Subsidies

= ₹ 35 – ₹ 10

= ₹ 25 crore

GDP at Market Price (GDP_MP) = GVA_FC + Net Indirect Taxes

= ₹ 1,185 + ₹ 25

= ₹ 1,210 crore

National Income (NNP_fc) = GVA_FC – Depreciation + Net Factor Income from Abroad

= ₹ 1,185 – ₹ 20 + ₹ 4

= ₹ 1,169 crore