Question

From the following data calculate:

1. National income
2. GDP at market prices by income method.

	(₹ crore)
(i) Compensation of employees	1,900
(ii) Net factor income from abroad	(−) 20
(iii) Rent	200
(iv) Interest	150
(v) Profits	370
(vi) Employees contribution is social security schemes	80
(vii) Consumption of fixed capital	100
(viii) Net indirect taxes	400

Answer 1

Included items (₹ in crore):

Compensation of employees = ₹ 1,900

Net factor income from abroad = ₹ (–20)

Rent = ₹ 200

Interest = ₹ 150

Profits = ₹ 370

Consumption of fixed capital = ₹ 100

Net indirect taxes = ₹ 400

Excluded item (₹ in crore):

Employees’ contribution to social security (excluded) = ₹ 80

Formula:

(a) National Income (NNP_FC) = Compensation of Employees + Rent + Interest + Profits + Net Factor Income from Abroad

= ₹ 1,900 + ₹ 200 + ₹ 150 + ₹ 370 + ₹ (–20)

= ₹ 2,600 crore

(b) GDP at Market Prices (GDP_MP) = NNP_FC + Net Indirect Taxes + Consumption of Fixed Capital – Net Factor Income from Abroad

= ₹ 2,600 + ₹ 400 + ₹ 100 – ₹ (–20)

= ₹ 2,600 + ₹ 400 + ₹ 100 + ₹ 20

= ₹ 3,120 crore