National Income Numericals

National Income
Income method
NDP at FC= Compensation of employees + Operating surplus + Mixed
income + Income from domestic products accruing to public sector
• Income from domestic products accruing to public sector =

Income from property and entrepreneurship accruing to government
administrative departments
+ Saving of non-departmental enterprises
Calculate the NDP at FC by using the income method.
S. No. Items Amount

(in crores)
(i) Wages 2,100
(ii) Rent 5,300
(iii) Interest 1,500
(iv) Profit 1,100
(v) Mixed income of self- 5,590
employed
(vi) Savings of non- 2,410

departmental enterprise
(vii) Income from property 8,000

and entrepreneurship to
government
administrative
departments
Working notes
• Compensation of employees = Wages in cash
= Rs. 2,100 crores
Operating surplus = Rent + Interest + Profit
= Rs. 5,300 crores + Rs. 1,500 + Rs. 1,100
= Rs. 7,900 crores
Income from domestic products accruing to public sector = Income from
property and entrepreneurship accruing to government administrative
departments + Saving of non-departmental enterprises
= Rs. 8,000 crores + Rs. 2,410
= Rs. 10,410 crores
Solution
• NDP at FC= Compensation of employees + Operating surplus + Mixed
= Rs. 2,100 crores + Rs.7,900 crores + Rs. 5,590 + Rs.10,410 crores
= Rs. 26,000 crores
Calculate the NDP at FC by using the income method.
S. No. Items Amount
(in crores)
(i) Wages and Salaries 32,100
(ii) Rent 52,300
(iii) Royalty 12,500
(iv) Interest 10,100
(v) Corporate tax 50,590
(vi) Dividend 20,410
(vii) Undistributed profit 81,000
(viii) Mixed income of self-employed 12,110
(ix) Savings of non-departmental 5,190

enterprise
(x) Income from property and 15,500

entrepreneurship to government
administrative departments
Solution
• NDP at FC = Compensation of employees + Operating surplus + Mixed
• = Rs. 32,100 crores + Rs. 2,26,900 crores + Rs. 12,110 crores + Rs.
20,690 crores
= Rs. 2,91,800 crores
Working Notes
• Compensation of employees = Wages and salaries in cash= Rs. 32,100 crores
• Operating surplus = Rent + Royalty + Interest + Profit
• = Rs. 52,300 crores + Rs. 12,500 crores + Rs. 10,100 + Rs. 1,52,000
• = Rs. 2,26,900 crores
• Profit = Undistributed profit + Dividend + Corporate tax
• = Rs. 81,000 crores + Rs. 20,410 crores + Rs.50,590 crores
• = Rs.1,52,000 crores
• Income from domestic products accruing to public sector = Income from
• property and entrepreneurship accruing to government administrative
• departments + Savings of non-departmental enterprises
• = Rs. 15,500 crores + Rs. 5,190 crores
• = Rs. 20,690 crores
Calculate the domestic income and national income by using the income
method.
S. No. Items Amount
(in crores)
(i) Compensation of 3,000
employees
(ii) Income from property 2,000
(iii) Income from 1,500
entrepreneurship
(iv) Mixed income of self- 4,500
employed
(v) Savings of non- 5,000
departmental enterprise
(vi) Income from property 2,000

and entrepreneurship to
government
administrative
departments
(vii) Depreciation 1,000

(viii) Net indirect taxes 500
(ix) Net factor income from 1,000
abroad
Solution
• NDP at FC = Compensation of employees + Income from property +
Income from entrepreneurship + Mixed income + Income from
domestic products accruing to public sector
• = Rs. 3,000 + Rs. 2,000 + Rs. 1,500+ Rs. 4,500 + Rs. 7,000 crores
• = Rs. 18,000 crores
• National income = NDP at FC + Net factor income from abroad
• = Rs. 18,000 crores + Rs. 1,000 crores
• = Rs. 19,000 crores
Expenditure method
• National income = C + I + G + (X − M)
• Where,
• C = Consumption by residents of the nation
• I = Investment
• G = Government spending
• X = Exports
• M = Imports
Investment expenditure
Calculate the GDP at MP by using the expenditure method.
S. No. Items Amount ₹ (in crores)
(i) Household final consumption expenditure 7800
(ii) Public final consumption expenditure 6700
(iii) Gross domestic capital formation 4500
(iv) Exports 3400
(v) Imports 1200

(i) Total final consumption expenditure 1000
(ii) Gross domestic fixed investment 2000
(iii) Closing stock 5000
(iv) Opening stock 4000
(v) Net imports 1000

(i) Private final consumption expenditure 2400
(ii) Government final consumption expenditure 2040
(iii) Gross business fixed investment 4200
(iv) Gross public investment 240

(v) Gross residential construction 400
(vi) Change in inventory 200

(vii) Net exports 420
Value added method
• Gross Value Added at MP = GDP at MP
• Step 1: The first step is to recognize and classify all the producing units of an economy into
primary, secondary, and tertiary sectors.
• Step 2: In this step, we will calculate the Gross Domestic Product at Market Price (GDPMP). For
calculating (GDPMP), we will calculate Gross Value Added at Market Price (GVAMP) of each sector
and total of (GVAMP) gives (GDPMP) i.e. ∑GVAMP = GDPMP
• Step 3: Now, we will calculate domestic income (NDPFC). For calculating domestic income, we will
subtract the amount of depreciation and net indirect tax from the Gross Domestic Product at
Market Price (GDPMP). This means NDPFC - Depreciation - Net Indirect Taxes.
• Step 4: Now, we will calculate net factor income from abroad (NFIA) to get national income. In this
step, NFIA is added to the domestic income to get the national income of the country i.e. NFIA +
NDPFC = NNPFC
Value Added method
• Net Value Added (NVA) at factor cost = sales +change in stock – value
of intermediate goods – net indirect tax – depreciation.
Other concepts
1. Gross National Disposable income [GNDI]=GNI+NFIA
2. Net National Disposable Income=GNI-CFC[depreciation]
3. Personal Income= NNP-Net Disposable income of government-
Current taxes on income, wealth etc-Net savings of public
corporations-net savings of pvt corporations-taxes paid by
corporations
4. Household disposable income=Personal income-Taxes

National Income Numericals

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National Income

• Income from domestic products accruing to public sector =

S. No. Items Amount

(vi) Savings of non- 2,410

(vii) Income from property 8,000

(ix) Savings of non-departmental 5,190

(x) Income from property and 15,500

(vi) Income from property 2,000

(vii) Depreciation 1,000

S. No. Items Amount ₹ (in crores)

(i) Household final consumption expenditure 7800

(ii) Public final consumption expenditure 6700

(iii) Gross domestic capital formation 4500

(iv) Exports 3400

(v) Imports 1200

S. No. Items Amount ₹ (in crores)

(i) Total final consumption expenditure 1000

(ii) Gross domestic fixed investment 2000

(iii) Closing stock 5000

(iv) Opening stock 4000

(v) Net imports 1000

S. No. Items Amount ₹ (in crores)

(i) Private final consumption expenditure 2400

(ii) Government final consumption expenditure 2040

(iii) Gross business fixed investment 4200

(iv) Gross public investment 240

(vi) Change in inventory 200

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