Question

Calculation National Income and Personal Disposable Income:

		(Rs crores)
1	Personal tax	80
2	Private final consumption expenditure	600
3	Undistributed profits	30
4	Private income	650
5	Government final consumption expenditure	100
6	Corporate tax	50
7	Net domestic fixed capital formation	70
8	Net indirect tax	60
9	Depreciation	14
10	Change in stocks	(-)10
11	Net imports	20
12	Net factor income to abroad	10

Answer 1

National Income = Private final consumption expenditure + Government final consumption expenditure + (Net domestic fixed capital formation + depreciation + change in stock) − Net imports − Depreciation − Net indirect taxes − Net factor income to abroad

= 600 + 100 + (70 + 14 − 10) − 20 − 14 − 60 − 10

= Rs 670 crore

Personal Disposable Income = Private income − Undistributed profits − Corporation tax − Personal tax

= 650 − 30 − 50 − 80

= Rs 490 crore