Question

From the following data, calculate GNP_FC, NDP_FC, and national income:

	Item	₹ in crores
(i)	Private final consumption expenditure	950
(ii)	Gross domestic fixed capital formation	370
(iii)	Consumption of fixed capital	20
(iv)	Government final consumption expenditure	410
(v)	Closing stock	300
(vi)	Subsidy	80
(vii)	Net exports	(−)50
(viii)	Wages and salaries	780
(ix)	Net factor income from abroad	(−)40
(x)	Indirect tax	180
(xi)	Opening stock	150
(xii)	Profit before tax	200

Answer 1

To calculate these three aggregates, we first need to calculate GDP_MP using the expenditure method.

GDP MP = Government final consumption expenditure + Private final consumption expenditure + Gross domestic capital formation + Net export

Thus,

⇒ GDP_MP = 410 + 950 + 520 + (− 50)

= 1830 crore

⇒ Gross domestic capital formation = Gross domestic fixed capital formation + change in stock

= (370 + 150)

= 520 crores

⇒ Change in stock = Closing stock − Opening stock

= (300 − 150)

= 150 crores

Now,

⇒ GNP_FC = GDP_MP + Net factor income from abroad − Net indirect taxes

= 1,830 + (− 40) − 100

= 1,690 crores

⇒ Net indirect taxes = Indirect tax − Subsidy

= (180 − 80)

= 100 crores

⇒ NDP_FC = GNP_FC − Consumption of fixed capital − Net factor income from abroad

= 1,690 − 20 − (− 40)

= 1,710 crores

⇒ NNPFC (National Income) = NDPFC + Net factor income from abroad

= 1,710 + (− 40)

= 1,670 crores

Thus,

• GNPFC = 1,690 crores,
• NDPFC = 1,710 crores and
• National Income = 1,670 crores.