Question

From the following information, calculate:

1. national income
2. GNP_MP by value added method

		(₹ in crore)
(i)	Value of output
	(a) Primary Sector	1,200
	(b) Secondary Sector	900
	(c) Tertiary Sector	700
(ii)	Intermediate consumption of
	(a) Primary Sector	100
	(b) Secondary Sector	300
	(c) Tertiary Sector	200
(iii)	Net factor income from abroad	25
(iv)	Consumption of fixed capital	75
(v)	Indirect taxes	30
(vi)	Subsidies	10

Answer 1

Given Data (₹ in crore):

Value of Output: Primary Sector = ₹ 1,200, Secondary Sector = ₹ 900, Tertiary Sector = ₹ 700

Intermediate Consumption: Primary Sector = ₹ 100, Secondary Sector = ₹ 300, Tertiary Sector = ₹ 200

Net factor income from abroad = ₹ 25

Consumption of fixed capital = ₹ 75

Indirect taxes = ₹ 30

Subsidies = ₹ 10

Formula: GDP at MP = Total Value of Output − Total Intermediate Consumption

= (₹ 1,200 + ₹ 900 + ₹ 700) − (₹ 100 + ₹ 300 + ₹ 200)

= ₹ 2800 − ₹ 600 

= ₹ 2,200 crore

NDP at Market Price (NDP_MP) = GDP_MP – Depreciation (Consumption of Fixed Capital)

= ₹ 2,200 – ₹ 75

= ₹ 2,125 crore

Net Indirect Taxes = Indirect Taxes – Subsidies

= ₹ 30 – ₹ 10

= ₹ 20 crore

NDP at Factor Cost (NDP_MP) = NDP_MP – Net Indirect Taxes

= ₹ 2,125 – ₹ 20

= ₹ 2,105 crore

(a) National Income (NNP_FC) = NDP_FC + Net Factor Income from Abroad

= ₹ 2,105 + ₹ 25

= ₹ 2,130 crore

(b) GNP at Market Price (GNP_MP) = GDP_MP + Net Factor Income from Abroad

= ₹ 2,200 + ₹ 25

= ₹ 2,225 crore