Question

Calculate national income from the following data:

Serial No. Particulars RS in crores

1 Current transfers by government 15

2 Private final consumption expenditure 400

3 Net indirect tax 60

4 Government final consumption expenditure 100

5 Net factor income from abroad -10

6 Net domestic capital formation 80

7 Consumption of fixed capital 50

8 Net exports 40 ​

Answer 1

Answer:   Item Rs. in crores

(i) Compensation of employees 700

(ii) Government final consumption expenditure 750

(iii) Net factor income from abroad (-) 10

(iv) Net exports (-) 15

(v) Profits 600

(vi) Net indirect taxes 60

(vii) Mixed income of self-employed 350

(viii) Rent 200

(ix) Interest 310

(x) Private final consumption expenditure 1100

(xi) Net domestic capital formation 385

(xii) Consumption of fixed capital 65

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