Question

On the basis of the data given below for an imaginary economy, estimate the value of Net Domestic Product at factor cost (NDP_FC):

S.No.	Items	Amount (₹ in crore)
(i)	Household Consumption Expenditure	2,000
(ii)	Government Final Consumption Expenditure	1,500
(iii)	Gross Domestic Fixed Capital Formation	1,000
(iv)	Net additions to stock	300
(v)	Exports	700
(vi)	Net Indirect Taxes	350
(vii)	Imports	200
(viii)	Consumption of Fixed Capital	250

Answer 1

NDP_FC = GDP_MP − Consumption of Fixed Capital − Net Indirect Taxes

= 5300 − 250 − 350

= 4700 crore

GDP_MP = Final Consumption Expenditure + Gross Domestic Capital Formation + Net Exports

= 3500 + 1300 + 500

= 5300 crore

1. Final Consumption Expenditure = Household Consumption Expenditure + Government Final Consumption Expenditure
   = 2000 + 1500
   = 3500 crore
2. Gross Domestic Capital Formation = Gross Domestic Fixed Capital Formation + Net addition to stocks
   = 1000 + 300
   = 1300 crore
3. Net export = Exports − Imports
   = 700 − 200
   = 500 crore.