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Questions
Differentiate between personal income and private income.
Make a comparison between private income and personal income.
Distinguish Between
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Solution
| Sr. No. | Personal income | Private income |
| 1. | It is the income that individuals actually receive from all the sources. | It is the income accruing to the private sector from all sources. |
| 2. | Corporate savings and corporate taxes remain excluded from personal income. | Both corporate savings and corporate taxes are parts of private income. |
| 3. | Personal Income = Private Income − (undistributed profits of the enterprises + corporate taxes + Contribution of the enterprises towards social security schemes) | Private income is income accruing from domestic product + net factor income earned abroad + interest on national debt + net current transfer payments from the government + the rest of the world. |
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RELATED QUESTIONS
Find national income and private income:
| (Rs crore) | ||
| (i) | Rent | 200 |
| (ii) | Net current transfer to abroad | 10 |
| (iii) | National debt interest | 60 |
| (iv) | Corporate tax | 100 |
| (v) | Composition of employees | 900 |
| (vi) | Current transfers from government | 150 |
| (vii) | Interest | 400 |
| (viii) | Interest | 50 |
| (ix) | Undistributed profits | 250 |
| (x) | Net factor income to abroad | (-)10 |
| (xi) | Income accruing to government | 120 |
Calculate National Income and Private Income :
| (Rs crores) | ||
| (i) | Net imports | 5 |
| (ii) | Net domestic capital formation | 15 |
| (iii) | Personal income | 90 |
| (iv) | National debt interest | 10 |
| (v) | Corporate tax | 25 |
| (vi) | Government final consumption expenditure | 20 |
| (vii) | Net factor income to abroad | (−) 5 |
| (viii) | Net indirect tax | 10 |
| (ix) | Undistributed profits | 0 |
| (x) | Private final consumption expenditure | 100 |
