Question

From the following data calculate National Income by income and expenditure methods:Items ( ` in crore) GFCE = 100; Subsidies = 10; Rent = 200;Wages and salaries = 600; Indirect tax = 60; PFCE = 800; GDCF = 120; Social security contributions by employers = 55;Royalty = 25; NFIA = - 30 ; Interest = 20;Consumption of fixed capital = 10;Profit = 130;Net exports = 70;Change in stock = 50 (1,000 crore. 1,000 crore) *​

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Asked on December 30, 2019 by

Jerry Suraj

From the following data, calculate National Income by Income method and Expenditure method:

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

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ANSWER

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.