Question

From the following data, calculate GNP_MP and NNP_FC by Expenditure Method.

	₹ (in crore)
(i) Mixed income of self-employed	450 crores
(ii) Compensation of employees	550 crores
(iii) Private final consumption expenditure	1000 crores
(iv) Net factor income from abroad	(−)20 crores
(v) Net indirect taxes	150 crores
(vi) Consumption of fixed capital	170 crores
(vii) Net domestic capital formation	380 crores
(viii) Net exports	(−)30 crores
(ix) Profits	400 crores
(x) Rent	150 crores
(xi) Interest	200 crores
(xii) Government final consumption expenditure	550 crores

Answer 1

Given Data: Private Final Consumption Expenditure (PFCE) = ₹ 1,000

Government Final Consumption Expenditure (GFCE) = ₹ 550

Net Domestic Capital Formation (NDCF) = ₹ 380

Consumption of Fixed Capital (Depreciation) = ₹ 170

Net Exports (X − M) = − ₹ 30

Net Factor Income from Abroad (NFIA) = − ₹ 20

Net Indirect Taxes (NIT) = ₹ 150

Formula: GDCF = NDCF + Depreciation

= ₹ 380 + ₹ 170

= ₹ 550 crore

GDP_MP = Private final consumption expenditure + Government final consumption expenditure + Gross Domestic Capital Formation + Net Export

= ₹ 1,000 + ₹ 550 + ₹ 550 + ₹ (−30) 

= ₹ 2,070

GNP_MP = GDP_MP + Net Factor Income from Abroad

= ₹ 2,070 + ₹ (–20)

= ₹ 2,050 crore

NNP_FC = GDP_MP – Depreciation + NFIA – NIT

= ₹ 2,070 – ₹ 170 + ₹ (−20) – ₹ 150

= ₹ 1,730 crore