Question

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

Answer 1

National Income (NNP_FC) = 50,000

We know,

NNP_FC = GDP_MP – Consumption of Fixed Capital – NIT + NFIA

50,000 = GDP_MP – 700 – 1,000 + 500

GDP_MP = 51,200

Now, we know as per the expenditure method:

GDP_MP = 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, NNP_FC = NDP_FC + NFIA

50,000 = NDP_FC + 500

NDP_FC = 50,000 – 500

NDP_FC = 49,500

Also, 

NDP_FC = Wages and Salaries + Operating Surplus + Mixed Income

49,500 = 20,000 + OS + 13,000 

Operating surplus = 16,500

So, operating surplus is equal to ₹ 12,500.