Question

9.From the following data calculate National Income by
(i) Income method and (ii) Expenditure method. (show the steps too.)
(Rs. In Crores)

(i) Compensation of employees 1,200
(ii) Net factor income from abroad (-)20
(iii) Net indirect taxes 120
(iv) Profit 800
(v) Private final consumption expenditure 2,000
(vi) Net domestic capital formation 770
(vii) Consumption of fixed capital 130
(viii) Rent 400
(ix) Interest 620
(x) Mixed income of self- employed 700
(xi) Net exports (-)30
(xii) Government final consumption expenditure 1,100

Answer 1

Explanation:

National income (income method) = Compensation of employees + Profits + Rent + Interest + Mixed income of self employed - Net factor income to abroad = 700 + 600 + 200 + 310 + 350 - 10 = 2150 crores

National income (expenditure method) = Govt. final consumption expenditure+Net domestic capital formation+Net exports+Private final consumption expenditure-Net indirect taxes-Net factor income to abroad=750 + 385 - 15 + 1100 - 60 - 10 = 2150 crores.

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