Question

Calculate Net Domestic Product at Factor Cost and Private Income:

		Rs crore
1	Gross National Disposable Income	600
2	Net current transfers to abroad	(-)20
3	Consumption of fixed capital	60
4	Current transfers from government	30
5	Indirect tax	100
6	Income accruing to government	80
7	Subsidies	10
8	Net factor income to abroad	(-)10
9	National debt interest	40
10	Personal tax	150

Answer 1

Gross National Disposable Income = Net National Disposable Income + Consumption of fixed capital

                                            600 = Net National Disposable Income + 60

    Net National Disposable Income = Rs 540 crore

Net National Disposable Income = Net Domestic Product at Factor Cost + (Indirect tax- Subsidies) + Net factor income from abroad + Net current transfers from abroad

                                         540 = Net Domestic Product at Factor Cost + (100-10)-(-10)-(-20)

                                         540 = Net Domestic Product at Factor Cost + 120

Net Domestic Product at Factor Cost = Rs 420 crore

Private Income = Net Domestic Product at Factor Cost- Income accruing to government + Net factor income from abroad + Current transfers from government+ Net current transfers from abroad+ National debt interest

Private Income = 420-80-(-10)+30-(-20)+40

Private Income = Rs 440 crore