Answer in Brief
Given the following data, find the missing values of 'Private Final Consumption Expenditure' and 'Operating Surplus'.
| S.No. | Particulars | Amount (In ₹ crores) |
| (i) | National Income | 50,000 |
| (ii) | Net Indirect Taxes | 1,000 |
| (iii) | Private Final Consumption Expenditure | ? |
| (iv) | Gross Domestic Capital Formation | 17,000 |
| (v) | Profits | 1,000 |
| (vi) | Government Final Consumption Expenditure | 12,500 |
| (vii) | Wages & Salaries | 20,000 |
| (viii) | Consumption of Fixed Capital | 700 |
| (ix) | Mixed Income of Self Employed | 13,000 |
| (x) | Operating Surplus | ? |
| (xi) | Net Factor Income from Abroad | 500 |
| (xii) | Net Exports | 2,000 |
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Solution
National Income (NNPFC) = 50,000
We know,
NNPFC = GDPMP - Consumption of Fixed Capital - NIT + NFIA
50,000 = GDPMP - 700 - 1,000 + 500
GDPMP = 51,200
Now, we know as per the expenditure method:
GDPMP = Private Final Consumption Expenditure + Government Final Consumption Expenditure + Gross Domestic Consumption Expenditure + Net Exports
51,200 = P + 12,500 + 17,000 + 2,000
Private Final Consumption Expenditure = ₹ 19,700
Now, NNPFC = NDPFC + NFIA
50,000 = NDPFC + 500
NDPFC = 45,500
Also,
NDPFC = Wages and Salaries + Operating Surplus + Mixed Income
45,500 = 20,000 + OS + 13,000
OS = 12,500
So, operating surplus is equal to ₹ 12,500.
Concept: Aggregate Demand and Its Components - Investment
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