Question

How should the following be treated in estimating National Income of a Country? Give valid reasons. 

Profit earned by Foreign Banks in India.

Answer 1

Foreign bank profits in India are included in the estimation of national income.

Reason:

Profits earned by foreign banks are considered a component of operating surplus under the National Income accounting framework. It is one of the GDP components. Regardless of nationality, GDP measures the value of products and services produced inside a country.