CBSE Class 12 Economics National Income Accounting Worksheet Set 05

Question. Explain the treatment assigned to the following while estimating national income. Give reasons.
(i) Family members working free on the farm owned by the family.
(ii) Rent free house from an employer.
(iii) Expenditure on free services provided by government.
Answer: (i) Family members working free on the farm owned by the family are engaged in the value addition process. Imputed value of their farm output is included in the estimation of national income. Accordingly, income generated by the farming family would be treated as mixed income of self-employed, which includes compensation of labour.
(ii) Rent free house from an employer is included in the estimation of national income because it is a kind of wages in kind and therefore, a part of compensation of employees.
(iii) Expenditure on free services provided by government should be included in the estimation of national income because expenditure on these services is a part of government final consumption expenditure.

Question. How will the following be treated while estimating national income? Give reasons.
(i) Expenditure on education of children by a family.
(ii) Payment of electricity bill by a school.
(iii) Payment of excise duty by a firm.
Answer: (i) Expenditure on education of children by a family is included in the estimation of national income since it is a part of private final consumption expenditure.
(ii) Payment of electricity bill by a school is not included in national income since it is a part of intermediate consumption.
(iii) Payment of excise duty by a firm only increases the market value of final goods and services. It is a tax and therefore a transfer payment. This is not included in the estimation of national income.

Question. How will the following be treated while estimating national income of India? Give reasons.
(i) Entertainment tax received by the government.
(ii) Capital gains to Indian residents from sale of shares of a foreign company.
(iii) Remittances from non-resident Indians to their families in India.
Answer: (i) Entertainment tax like any other tax is a transfer payment. It is not to be included in the estimation of national income.
(ii) Capital gains to Indian residents from sale of shares of a foreign company is not included in the national income of India because it is a part of financial transactions corresponding to which there is no flow of goods and services in the economy.
(iii) Remittances from non-resident Indians to their families in India are to be treated as transfer payments. Accordingly, these are not to be included in the estimation of national income of India.

Question. While estimating national income, how will the following be treated? Give reasons.
(i) Imputed rent of self-occupied houses.
(ii) Interest received on debentures.
(iii) Financial help received by flood victims.
Answer: (i) Imputed rent of self-occupied houses is included in the estimation of national income. This is because all houses have rental value, no matter whether these are rented out or self-occupied.
(ii) Interest received on debentures is included in the estimation of national income. This is because income from debentures is a factor income.
(iii) Financial help received by flood victims is not included in the estimation of national income. This is because financial help is a transfer payment.

Question. How will the following be treated while estimating national income? Give reasons.
(i) Capital gain on sale of a house.
(ii) Prize won in a lottery.
(iii) Interest on public debt.
Answer: (i) Capital gain on sale of a house is not included in the estimation of national income because it does not add to the flow of goods and services in the economy.
(ii) Prize won in a lottery is not included in the estimation of national income because it is a windfall gain and therefore treated as a transfer payment.
(iii) Interest on public debt is deemed as transfer payment. Hence, not included in the estimation of national income.

Question. How will the following be treated while estimating national income of India? Give reasons.
(i) Value of bonus shares received by shareholders of a company.
(ii) Fees received from students.
(iii) Interest received on loan given to a foreign company in India.
Answer: (i) Value of bonus shares received by shareholders of a company is not included in the estimation of national income of India because these are just financial transactions (leading to change of ownership of financial assets), not contributing to the flow of goods and services in the economy.
(ii) From the students' point of view, expenditure on fees is to be treated as a part of private final consumption expenditure. Accordingly, it is to be included in the estimation of national income of India when expenditure method is used to estimate it. However, from the schools' point of view, fee received is just a revenue from the sale of services.
(iii) Interest received on loan given to a foreign company in India is included in estimating national income of India as a part of net factor income from abroad.

Question. Giving reason, explain how should the following be treated in estimating gross domestic product of India.
(i) Fees to a mechanic paid by a firm.
(ii) Expenditure on purchasing a car for use by a firm.
(iii) Salary of Indian residents working in Russian Embassy in India.
Answer: (i) Fees to a mechanic paid by a firm will not be included in the estimation of gross domestic product of India because this fees is an intermediate expenditure for the firm and not a final expenditure.
(ii) Expenditure on purchasing a car for use by a firm will be included in the estimation of gross domestic product of India because it is an investment expenditure. The car purchased will be used by the firm for many years and the firm will be a final user of the car, provided it is neither a second hand car nor purchased for further sale.
(iii) Salary of Indian residents working in Russian Embassy in India is not included in gross domestic product of India because Russian Embassy is not a part of domestic territory of India.

Question. How should the following be treated while estimating national income? Give reasons.
(i) Purchase of taxi by a taxi driver.
(ii) Bonus paid to employees.
(iii) Expenditure on providing police services by the government.
Answer: (i) Purchase of taxi by a taxi driver will be included in the estimation of national income because it is an investment expenditure. A taxi will be used by the taxi driver for several years to earn his living.
(ii) Bonus paid to employees will be included in the estimation of national income since it is a component of compensation of employees.
(iii) Expenditure on providing police services by the government should be included in the estimation of national income because expenditure incurred by the government is a part of government's final consumption expenditure.

Question. Will the following factor income be included in domestic factor income of India? Give reasons for your answer: 
(i) Compensation of employees to the resident of Japan working in Indian embassy in Japan.
(ii) Payment of fees to a chartered accountant by a firm.
(iii) Rent received by an Indian resident from Russian embassy in India.
(iv) Compensation given by insurance company to an injured worker.
Answer: (i) Compensation of employees to the resident of Japan working in Indian embassy in Japan is included in domestic factor income of India because Indian embassy in Japan is a part of domestic territory of India.
(ii) Payment of fees to a chartered accountant by a firm is not included in the domestic factor income of India as it is an intermediate expenditure of the firm.
(iii) Rent received by an Indian resident from Russian embassy in India is not included in domestic factor income of India because Russian embassy in India is not a part of domestic territory of India.
(iv) Compensation given by insurance company to an injured worker is not included in domestic factor income of India. Because this compensation is not a part of factor payment (or a part of compensation of employees).

NUMERICAL

Question. From the following data, calculate the 'Gross Domestic Product at Market Price':
Items (Rs. in crore)
(i) Value of output of primary sector: 2,000
(ii) Intermediate consumption of secondary sector: 800
(iii) Intermediate consumption of primary sector: 1,000
(iv) Net factor income from abroad: (-) 30
(v) Net indirect taxes: 300
(vi) Value of output of tertiary sector: 1,400
(vii) Value of output of secondary sector: 1,800
(viii) Intermediate consumption of tertiary sector: 600
Answer: 
\( = (2,000 - 1,000) + (1,800 - 800) + (1,400 - 600) \)
\( = 1,000 + 1,000 + 800 \)
\( = 2,800 \)
\( GDP_{MP} = \text{Rs. } 2,800 \text{ crore} \).

Question. Find out 'Gross Domestic Product at Factor Cost' from the following data:
Items (Rs. in crore)
(i) Compensation of employees: 110
(ii) Operating surplus: 90
(iii) Mixed income of the self-employed: 100
(iv) Consumption of fixed capital: 70
(v) Net indirect taxes: 10

Answer:
Gross Domestic Product at Factor Cost = Compensation of employees + Operating surplus + Mixed income of the self-employed + Consumption of fixed capital
\( = \text{Rs. } 110 \text{ crore} + \text{Rs. } 90 \text{ crore} + \text{Rs. } 100 \text{ crore} + \text{Rs. } 70 \text{ crore} \)
\( = \text{Rs. } 370 \text{ crore} \)
Gross domestic product at factor cost = Rs. 370 crore.

Question. Calculate 'Net Domestic Product at Market Price' from the following data:
Items (Rs. in crore)
(i) Net indirect taxes: 38
(ii) Consumption of fixed capital: 34
(iii) Net factor income from abroad: (-) 3
(iv) Rent: 10
(v) Profit: 25
(vi) Interest: 20
(vii) Royalty: 5
(viii) Wages and salaries: 170
(ix) Employers' contribution to social security schemes: 30

Answer:
Net Domestic Product at Market Price = Wages and salaries + Employers' contribution to social security schemes + Rent + Profit + Interest + Royalty + Net indirect taxes
\( = \text{Rs. } 170 \text{ crore} + \text{Rs. } 30 \text{ crore} + \text{Rs. } 10 \text{ crore} + \text{Rs. } 25 \text{ crore} + \text{Rs. } 20 \text{ crore} + \text{Rs. } 5 \text{ crore} + \text{Rs. } 38 \text{ crore} \)
\( = \text{Rs. } 298 \text{ crore} \)
Net domestic product at market price = Rs. 298 crore.

Question. Given the following data, calculate 'Net Domestic Product at Factor Cost or Domestic Income':
Items (Rs. in crore)
(i) Wages: 10,000
(ii) Rent: 5,000
(iii) Interest: 400
(iv) Dividend: 3,000
(v) Mixed Income of the self-employed: 400
(vi) Undistributed profit: 200
(vii) Contribution to social security: 400
(viii) Corporation profit tax: 400

Answer:
Net Domestic Product at Factor Cost = Wages + Rent + Interest + Dividend + Mixed income of the self-employed + Undistributed profit + Contribution to social security + Corporation profit tax
\( = \text{Rs. } 10,000 \text{ crore} + \text{Rs. } 5,000 \text{ crore} + \text{Rs. } 400 \text{ crore} + \text{Rs. } 3,000 \text{ crore} + \text{Rs. } 400 \text{ crore} + \text{Rs. } 200 \text{ crore} + \text{Rs. } 400 \text{ crore} + \text{Rs. } 400 \text{ crore} \)
\( = \text{Rs. } 19,800 \text{ crore} \)
Net domestic product at factor cost = Rs. 19,800 crore.

Question. Calculate 'Gross National Product at Market Price' from the following data:
Items (Rs. in crore)
(i) Profit: 220
(ii) Compensation of employees: 350
(iii) Interest: 100
(iv) Consumption of fixed capital: 50
(v) Opening stock: 30
(vi) Subsidies: 20
(vii) Closing stock: 50
(viii) Mixed income of the self-employed: 150
(ix) Contribution to social security schemes: 30
(x) Net factor income from abroad: 10
(xi) Rent: 80
(xii) Indirect taxes: 90

Answer:
Gross National Product at Market Price = Compensation of employees + Profit + Interest + Rent + Mixed income of the self-employed + Net factor income from abroad + Consumption of fixed capital + Indirect taxes - Subsidies
\( = \text{Rs. } 350 \text{ crore} + \text{Rs. } 220 \text{ crore} + \text{Rs. } 100 \text{ crore} + \text{Rs. } 80 \text{ crore} + \text{Rs. } 150 \text{ crore} + \text{Rs. } 10 \text{ crore} + \text{Rs. } 50 \text{ crore} + \text{Rs. } 90 \text{ crore} - \text{Rs. } 20 \text{ crore} \)
\( = \text{Rs. } 1,030 \text{ crore} \)
Gross national product at market price = Rs. 1,030 crore.
[Note: Item (ix) is already included in item (ii).]

Question. From the following data, calculate 'Gross National Product at Factor Cost':
Items (Rs. in crore)
(i) Gross fixed capital formation: 100
(ii) Change in stocks: 20
(iii) Net capital formation: 110
(iv) Mixed income of the self-employed: 200
(v) Net factor income from abroad: (-) 10
(vi) Net exports: (-) 20
(vii) Compensation of employees: 250
(viii) Operating surplus: 400
(ix) Net indirect taxes: 50

Answer:
Gross National Product at Factor Cost = Compensation of employees + Operating surplus + Mixed income of the self-employed + Net factor income from abroad + Consumption of fixed capital
(Consumption of fixed capital = Gross fixed capital formation + Change in stocks - Net capital formation)
\( = \text{Rs. } 250 \text{ crore} + \text{Rs. } 400 \text{ crore} + \text{Rs. } 200 \text{ crore} + (-) \text{Rs. } 10 \text{ crore} + (\text{Rs. } 100 \text{ crore} + \text{Rs. } 20 \text{ crore} - \text{Rs. } 110 \text{ crore}) \)
\( = \text{Rs. } 250 \text{ crore} + \text{Rs. } 400 \text{ crore} + \text{Rs. } 200 \text{ crore} - \text{Rs. } 10 \text{ crore} + \text{Rs. } 10 \text{ crore} \)
\( = \text{Rs. } 850 \text{ crore} \)
Gross national product at factor cost = Rs. 850 crore.
[Hint: Consumption of fixed capital is calculated as difference between Gross domestic capital formation (Gross fixed capital formation + Change in stocks) and Net capital formation.]

Question. Calculate 'Net National Product at Market Price', and 'Net National Product at Factor Price' from the following data:
Items (Rs. in crore)
(i) Indirect taxes: 9,000
(ii) Subsidies: 1,800
(iii) Depreciation: 1,700
(iv) Mixed income of self-employed: 1,600
(v) Operating surplus: 6,000
(vi) Gross domestic product at market price: 20,000
(vii) Net factor income to abroad: (-) 200

Answer:
Net National Product at Market Price = Gross domestic product at market price - Depreciation - Net factor income to abroad
\( = \text{Rs. } 20,000 \text{ crore} - \text{Rs. } 1,700 \text{ crore} - (-) \text{Rs. } 200 \text{ crore} \)
\( = \text{Rs. } 20,000 \text{ crore} - \text{Rs. } 1,700 \text{ crore} + \text{Rs. } 200 \text{ crore} \)
\( = \text{Rs. } 18,500 \text{ crore} \)
Net National Product at Factor Cost = Net national product at market price - Indirect taxes + Subsidies
\( = \text{Rs. } 18,500 \text{ crore} - \text{Rs. } 9,000 \text{ crore} + \text{Rs. } 1,800 \text{ crore} \)
\( = \text{Rs. } 11,300 \text{ crore} \)
Net national product at market price = Rs. 18,500 crore.
Net national product at factor cost = Rs. 11,300 crore.

Question. Firm A spent Rs. 500 on non-factor inputs and produced goods worth Rs. 900. It sold goods worth Rs. 600 and Rs. 300 to Firm B and consumer households respectively. Find out Gross Value Added by Firm A.

Answer:
Gross Value Added by Firm A = Value of goods produced (Sold to firm B + Sold to consumer households) - Value of non-factor inputs
\( = \text{Rs. } 900 (\text{Rs. } 600 + \text{Rs. } 300) - \text{Rs. } 500 \)
\( = \text{Rs. } 400 \)
Gross value added by firm A = Rs. 400.

Question. Calculate 'Value Added by Firm X and Firm Y' from the following data:
Items (Rs. in lakh)
(i) Sales by firm X to households: 100
(ii) Sales by firm Y: 500
(iii) Purchases by households from firm Y: 300
(iv) Exports by firm Y: 50
(v) Change in stock of firm X: 20
(vi) Change in stock of firm Y: 10
(vii) Imports by firm X: 70
(viii) Sales by firm Z to firm Y: 250
(ix) Purchases by firm Y from firm X: 200

Answer:
Calculation for Firm X:
Sales (1) = Sales to households (100) + Sales to Firm Y (200) = 300
Change in Stock (2) = 20
Purchases from Other Firms (3) = 70 (Imports)
Value added by firm X = (1) + (2) - (3) = 300 + 20 - 70 = Rs. 250 lakh.

Calculation for Firm Y:
Sales (1) = 500
Change in Stock (2) = 10
Purchases from Other Firms (3) = Sales by Firm Z to Y (250) + Purchases from Firm X (200) = 450
Value added by firm Y = (1) + (2) - (3) = 500 + 10 - 450 = Rs. 60 lakh.

Question. Find out 'Value Added by Firm B' from the following data:
Items (Rs. in lakh)
(i) Purchases by firm B from firm A: 30
(ii) Sales by firm B to firm C: 25
(iii) Sales by firm B to households: 35
(iv) Opening stock of firm B: 5
(v) Opening stock of firm C: 10
(vi) Closing stock of firm B: 10
(vii) Purchases by firm B from firm D: 15
(viii) Exports by firm B: 20

Answer:
Value Added by Firm B = Sales by firm B + Change in stock of firm B - Purchases from other firms
(i) Sales = Sales by Firm B to Firm C (25) + Sales by Firm B to Households (35) + Export by Firm B (20) = 80
(ii) Change in Stock of Firm B = Closing Stock - Opening stock = 10 - 5 = 5
(iii) Purchases of Firm B from other Firms = Purchase from Firm A (30) + Purchase from Firm D (15) = 45
Value Added = (80 + 5) - 45 = 40
Value added by firm B = Rs. 40 lakh.

Question. From the following data about Firm X, calculate 'Gross Value Added at Factor Cost' by it:
Items (Rs. in crore)
(i) Sales: 500
(ii) Opening stock: 30
(iii) Closing stock: 20
(iv) Purchase of intermediate products: 300
(v) Purchase of machinery: 150
(vi) Subsidy: 40

Answer:
Gross Value Added at Factor Cost by Firm X
= Sales + Change in stock (Closing stock - Opening stock) - Purchase of intermediate products + Subsidy
\( = \text{Rs. } 500 \text{ crore} + (\text{Rs. } 20 \text{ crore} - \text{Rs. } 30 \text{ crore}) - \text{Rs. } 300 \text{ crore} + \text{Rs. } 40 \text{ crore} \)
\( = \text{Rs. } 500 \text{ crore} - \text{Rs. } 10 \text{ crore} - \text{Rs. } 300 \text{ crore} + \text{Rs. } 40 \text{ crore} \)
\( = \text{Rs. } 230 \text{ crore} \)
Gross value added at factor cost by firm X = Rs. 230 crore.

Question. From the following data about Firm A, calculate 'Net Value Added at Market Price' by it:
Items (Rs. in lakh)
(i) Sales: 700
(ii) Change in stock: 40
(iii) Depreciation: 80
(iv) Net indirect taxes: 100
(v) Purchase of machinery: 250
(vi) Purchase of intermediate products: 400

Answer:
Net Value Added at Market Price by Firm A
= Sales + Change in stock - Depreciation - Purchase of intermediate products
\( = \text{Rs. } 700 \text{ lakh} + \text{Rs. } 40 \text{ lakh} - \text{Rs. } 80 \text{ lakh} - \text{Rs. } 400 \text{ lakh} \)
\( = \text{Rs. } 260 \text{ lakh} \)
Net value added at market price by firm A = Rs. 260 lakh.

Question. Calculate 'Net Value Added at Factor Cost' from the following data:
Items (Rs. in lakh)
(i) Purchases of raw materials: 300
(ii) Import duty: 20
(iii) Excise duty: 30
(iv) Net addition to stocks: 50
(v) Value of output: 500
(vi) Depreciation: 10

Answer:
Net Value Added at Factor Cost = Value of output - Purchase of raw materials - Depreciation - Import duty - Excise duty
\( = \text{Rs. } 500 \text{ lakh} - \text{Rs. } 300 \text{ lakh} - \text{Rs. } 10 \text{ lakh} - \text{Rs. } 20 \text{ lakh} - \text{Rs. } 30 \text{ lakh} \)
\( = \text{Rs. } 140 \text{ lakh} \)
Net value added at factor cost = Rs. 140 lakh.

Question. Calculate 'Value of Output' from the following data:
Items (Rs. in lakh)
(i) Net value added at factor cost: 150
(ii) Intermediate consumption: 100
(iii) Excise duty: 20
(iv) Subsidy: 5
(v) Depreciation: 10

Answer:
Value of Output = Net value added at factor cost + Intermediate consumption + Excise duty - Subsidy + Depreciation
\( = \text{Rs. } 150 \text{ lakh} + \text{Rs. } 100 \text{ lakh} + \text{Rs. } 20 \text{ lakh} - \text{Rs. } 5 \text{ lakh} + \text{Rs. } 10 \text{ lakh} \)
\( = \text{Rs. } 275 \text{ lakh} \)
Value of output = Rs. 275 lakh.

Question. Calculate 'Intermediate Consumption' from the following data:
Items (Rs. in crore)
(i) Value of output: 220
(ii) Net value added at factor cost: 100
(iii) Sales tax: 15
(iv) Subsidy: 5
(v) Depreciation: 20

Answer:
Intermediate Consumption = Value of output - Net value added at factor cost - Net indirect taxes - Depreciation
\( = \text{Rs. } 220 \text{ crore} - \text{Rs. } 100 \text{ crore} - (\text{Rs. } 15 \text{ crore} - \text{Rs. } 5 \text{ crore}) - \text{Rs. } 20 \text{ crore} \)
\( = \text{Rs. } 220 \text{ crore} - \text{Rs. } 100 \text{ crore} - \text{Rs. } 10 \text{ crore} - \text{Rs. } 20 \text{ crore} \)
\( = \text{Rs. } 90 \text{ crore} \)
Intermediate consumption = Rs. 90 crore.

Question. Calculate 'Sales' from the following data:
Items (Rs. in lakh)
(i) Net value added at factor cost: 300
(ii) Intermediate consumption: 240
(iii) Indirect tax: 30
(iv) Depreciation: 40
(v) Change in stock: (-) 60

Answer:
Sales = Net value added at factor cost - Change in stock + Intermediate consumption + Depreciation + Net indirect tax
\( = \text{Rs. } 300 \text{ lakh} - (-) \text{Rs. } 60 \text{ lakh} + \text{Rs. } 240 \text{ lakh} + \text{Rs. } 40 \text{ lakh} + \text{Rs. } 30 \text{ lakh} \)
\( = \text{Rs. } 300 \text{ lakh} + \text{Rs. } 60 \text{ lakh} + \text{Rs. } 240 \text{ lakh} + \text{Rs. } 40 \text{ lakh} + \text{Rs. } 30 \text{ lakh} \)
\( = \text{Rs. } 670 \text{ lakh} \)
Sales = Rs. 670 lakh.

Question. Find 'Net Value Added at Market Price':
Items
(i) Output sold (units): 1,000
(ii) Price per unit of output (Rs.): 30
(iii) Excise (Rs.): 1,600
(iv) Import duty (Rs.): 400
(v) Net change in stocks (Rs.): (-) 500
(vi) Depreciation (Rs.): 2,000
(vii) Intermediate cost (Rs.): 8,000

Answer:
Net Value Added at Market Price = Sales (Output sold x Price per unit of output) + Net change in stocks - Intermediate cost - Depreciation
\( = (1,000 \times \text{Rs. } 30) + (-) \text{Rs. } 500 - \text{Rs. } 8,000 - \text{Rs. } 2,000 \)
\( = \text{Rs. } 30,000 - \text{Rs. } 500 - \text{Rs. } 8,000 - \text{Rs. } 2,000 \)
\( = \text{Rs. } 19,500 \)
Net value added at market price = Rs. 19,500.

Question. Calculate 'National Income' from the following data:
Items (Rs. in crore)
(i) Mixed income of the self-employed: 200
(ii) Old-age pension: 20
(iii) Dividends: 100
(iv) Operating surplus: 900
(v) Wages and salaries: 500
(vi) Profit: 400
(vii) Employers' contribution to social security schemes: 50
(viii) Net factor income from abroad: (-) 10
(ix) Consumption of fixed capital: 50
(x) Net indirect taxes: 50

Answer:
National Income = Wages and salaries + Employers' contribution to social security schemes + Operating surplus + Mixed income of the self-employed + Net factor income from abroad
\( = \text{Rs. } 500 \text{ crore} + \text{Rs. } 50 \text{ crore} + \text{Rs. } 900 \text{ crore} + \text{Rs. } 200 \text{ crore} + (-) \text{Rs. } 10 \text{ crore} \)
\( = \text{Rs. } 500 \text{ crore} + \text{Rs. } 50 \text{ crore} + \text{Rs. } 900 \text{ crore} + \text{Rs. } 200 \text{ crore} - \text{Rs. } 10 \text{ crore} \)
\( = \text{Rs. } 1,640 \text{ crore} \)
National income = Rs. 1,640 crore.

Question. Calculate 'National Income' from the following data:
Items (Rs. in crore)
(i) Current transfers by government: 15
(ii) Private final consumption expenditure: 400
(iii) Net current transfers from rest of the world: 20
(iv) Government final consumption expenditure: 100
(v) Net factor income from abroad: (-) 10
(vi) Net domestic capital formation: 80
(vii) Consumption of fixed capital: 50
(viii) Net exports: 40
(ix) Net indirect taxes: 60

Answer:
National Income = Private final consumption expenditure + Government final consumption expenditure + Net domestic capital formation + Net exports - Net indirect taxes + Net factor income from abroad
\( = \text{Rs. } 400 \text{ crore} + \text{Rs. } 100 \text{ crore} + \text{Rs. } 80 \text{ crore} + \text{Rs. } 40 \text{ crore} - \text{Rs. } 60 \text{ crore} + (-) \text{Rs. } 10 \text{ crore} \)
\( = \text{Rs. } 400 \text{ crore} + \text{Rs. } 100 \text{ crore} + \text{Rs. } 80 \text{ crore} + \text{Rs. } 40 \text{ crore} - \text{Rs. } 60 \text{ crore} - \text{Rs. } 10 \text{ crore} \)
\( = \text{Rs. } 550 \text{ crore} \)
National income = Rs. 550 crore.

Question. Calculate 'Gross National Product at Market Price' from the following data:
Items (Rs. in crore)
(i) Current transfers from government: 25
(ii) Compensation of employees: 600
(iii) Net current transfers from rest of the world: 20
(iv) Rent: 100
(v) Consumption of fixed capital: 50
(vi) Interest: 120
(vii) Net indirect taxes: 110
(viii) Profit: 80
(ix) Mixed income of the self-employed: 200
(x) Net factor income from abroad: (-) 10

Answer:
Gross National Product at Market Price = Compensation of employees + Rent + Interest + Profit + Mixed income of the self-employed + Consumption of fixed capital + Net indirect taxes + Net factor income from abroad
\( = \text{Rs. } 600 \text{ crore} + \text{Rs. } 100 \text{ crore} + \text{Rs. } 120 \text{ crore} + \text{Rs. } 80 \text{ crore} + \text{Rs. } 200 \text{ crore} + \text{Rs. } 50 \text{ crore} + \text{Rs. } 110 \text{ crore} + (-) \text{Rs. } 10 \text{ crore} \)
\( = \text{Rs. } 600 \text{ crore} + \text{Rs. } 100 \text{ crore} + \text{Rs. } 120 \text{ crore} + \text{Rs. } 80 \text{ crore} + \text{Rs. } 200 \text{ crore} + \text{Rs. } 50 \text{ crore} + \text{Rs. } 110 \text{ crore} - \text{Rs. } 10 \text{ crore} \)
\( = \text{Rs. } 1,250 \text{ crore} \)
Gross national product at market price = Rs. 1,250 crore.

Question. Calculate 'National Income' from the following data:
Items (Rs. in crore)
(i) Net current transfers to abroad: 15
(ii) Net exports: (-) 20
(iii) Private final consumption expenditure: 400
(iv) Net factor income to abroad: 10
(v) Government final consumption expenditure: 100
(vi) Indirect tax: 30
(vii) Net domestic capital formation: 50
(viii) Change in stocks: 7
(ix) Subsidy: 5

Answer:
National Income = Private final consumption expenditure + Government final consumption expenditure + Net domestic capital formation + Net exports - Net factor income to abroad - Net indirect taxes (Indirect tax - Subsidy)
\( = \text{Rs. } 400 \text{ crore} + \text{Rs. } 100 \text{ crore} + \text{Rs. } 50 \text{ crore} + (-) \text{Rs. } 20 \text{ crore} - \text{Rs. } 10 \text{ crore} - (\text{Rs. } 30 \text{ crore} - \text{Rs. } 5 \text{ crore}) \)
\( = \text{Rs. } 400 \text{ crore} + \text{Rs. } 100 \text{ crore} + \text{Rs. } 50 \text{ crore} - \text{Rs. } 20 \text{ crore} - \text{Rs. } 10 \text{ crore} - \text{Rs. } 25 \text{ crore} \)
\( = \text{Rs. } 495 \text{ crore} \)
National income = Rs. 495 crore.

Question. Calculate 'National Income' from the following data:
Items (Rs. in crore)
(i) Private final consumption expenditure: 600
(ii) Net domestic capital formation: 70
(iii) Net exports: (-) 20
(iv) Current transfers from government: 5
(v) Government final consumption expenditure: 100
(vi) Net indirect taxes: 30
(vii) Net factor income from abroad: 10

Answer:
National Income = Private final consumption expenditure + Government final consumption expenditure + Net domestic capital formation + Net exports - Net indirect taxes + Net factor income from abroad
\( = \text{Rs. } 600 \text{ crore} + \text{Rs. } 100 \text{ crore} + \text{Rs. } 70 \text{ crore} + (-) \text{Rs. } 20 \text{ crore} - \text{Rs. } 30 \text{ crore} + \text{Rs. } 10 \text{ crore} \)
\( = \text{Rs. } 600 \text{ crore} + \text{Rs. } 100 \text{ crore} + \text{Rs. } 70 \text{ crore} - \text{Rs. } 20 \text{ crore} - \text{Rs. } 30 \text{ crore} + \text{Rs. } 10 \text{ crore} \)
\( = \text{Rs. } 730 \text{ crore} \)
National income = Rs. 730 crore.

Question. Calculate 'National Income' from the following:
Items (Rs. in crore)
(i) Net domestic fixed capital formation: 120
(ii) Private final consumption expenditure: 400
(iii) Consumption of fixed capital: 120
(iv) Net factor income to abroad: (-) 10
(v) Government final consumption expenditure: 300
(vi) Net indirect taxes: 100
(vii) Net imports: 30
(viii) Change in stocks: (-) 20

Answer:
Gross Domestic Product at Market Price = Private final consumption expenditure + Government final consumption expenditure + Net domestic fixed capital formation + Consumption of fixed capital + Change in stocks - Net imports
\( = \text{Rs. } 400 \text{ crore} + \text{Rs. } 300 \text{ crore} + \text{Rs. } 120 \text{ crore} + \text{Rs. } 120 \text{ crore} + (-) \text{Rs. } 20 \text{ crore} - \text{Rs. } 30 \text{ crore} \)
\( = \text{Rs. } 400 \text{ crore} + \text{Rs. } 300 \text{ crore} + \text{Rs. } 120 \text{ crore} + \text{Rs. } 120 \text{ crore} - \text{Rs. } 20 \text{ crore} - \text{Rs. } 30 \text{ crore} \)
\( = \text{Rs. } 890 \text{ crore} \)
National Income = Gross domestic product at market price - Consumption of fixed capital - Net indirect taxes - Net factor income to abroad
\( = \text{Rs. } 890 \text{ crore} - \text{Rs. } 120 \text{ crore} - \text{Rs. } 100 \text{ crore} - (-) \text{Rs. } 10 \text{ crore} \)
\( = \text{Rs. } 890 \text{ crore} - \text{Rs. } 120 \text{ crore} - \text{Rs. } 100 \text{ crore} + \text{Rs. } 10 \text{ crore} \)
\( = \text{Rs. } 680 \text{ crore} \)
National income = Rs. 680 crore.

Question. Calculate 'Net Domestic Product at Factor Cost' from the following:
Items (Rs. in crore)
(i) Wages and salaries: 1,200
(ii) Net current transfers to abroad: (-) 20
(iii) Rent: 100
(iv) Interest paid by the production units: 130
(v) Corporation tax: 50
(vi) Contribution to social security schemes by employers: 250
(vii) Dividends: 100
(viii) Undistributed profits: 20

Answer:
Net Domestic Product at Factor Cost = Wages and salaries + Contribution to social security schemes by employers + Rent + Interest + Corporation tax + Dividends + Undistributed profits
\( = \text{Rs. } 1,200 \text{ crore} + \text{Rs. } 250 \text{ crore} + \text{Rs. } 100 \text{ crore} + \text{Rs. } 130 \text{ crore} + \text{Rs. } 50 \text{ crore} + \text{Rs. } 100 \text{ crore} + \text{Rs. } 20 \text{ crore} \)
\( = \text{Rs. } 1,850 \text{ crore} \)
Net domestic product at factor cost = Rs. 1,850 crore.

Question. Calculate 'Gross National Product at Market Price' from the following:
Items (Rs. in crore)
(i) Net factor income to abroad: 10
(ii) Net indirect taxes: 250
(iii) Operating surplus: 600
(iv) Corporation tax: 170
(v) Undistributed profits: 10
(vi) Mixed income: 500
(vii) Consumption of fixed capital: 100
(viii) Personal taxes: 150
(ix) Compensation of employees: 1,100

Answer:
Gross National Product at Market Price = Compensation of employees + Operating surplus + Mixed income + Consumption of fixed capital + Net indirect taxes - Net factor income to abroad
\( = \text{Rs. } 1,100 \text{ crore} + \text{Rs. } 600 \text{ crore} + \text{Rs. } 500 \text{ crore} + \text{Rs. } 100 \text{ crore} + \text{Rs. } 250 \text{ crore} - \text{Rs. } 10 \text{ crore} \)
\( = \text{Rs. } 2,540 \text{ crore} \)
Gross national product at market price = Rs. 2,540 crore.

Question. Find out 'Net National Product at Market Price':
Items (Rs. in crore)
(i) Net current transfers from abroad: (-) 10
(ii) Wages and salaries: 650
(iii) Net factor income to abroad: (-) 20
(iv) Social security contributions by employers: 50
(v) Net indirect taxes: 80
(vi) Rent: 200
(vii) Consumption of fixed capital: 120
(viii) Corporate tax: 50
(ix) Dividend: 150
(x) Undistributed profits: 60
(xi) Interest: 250

Answer:
Net National Product at Market Price = Wages and salaries + Social security contributions by employers + Rent + Interest + Corporate tax + Dividend + Undistributed profits + Net indirect taxes - Net factor income to abroad
\( = \text{Rs. } 650 \text{ crore} + \text{Rs. } 50 \text{ crore} + \text{Rs. } 200 \text{ crore} + \text{Rs. } 250 \text{ crore} + \text{Rs. } 50 \text{ crore} + \text{Rs. } 150 \text{ crore} + \text{Rs. } 60 \text{ crore} + \text{Rs. } 80 \text{ crore} - (-) \text{Rs. } 20 \text{ crore} \)
\( = \text{Rs. } 650 \text{ crore} + \text{Rs. } 50 \text{ crore} + \text{Rs. } 200 \text{ crore} + \text{Rs. } 250 \text{ crore} + \text{Rs. } 50 \text{ crore} + \text{Rs. } 150 \text{ crore} + \text{Rs. } 60 \text{ crore} + \text{Rs. } 80 \text{ crore} + \text{Rs. } 20 \text{ crore} \)
\( = \text{Rs. } 1,510 \text{ crore} \)
Net national product at market price = Rs. 1,510 crore.

Question. Find out 'Gross Domestic Product at Market Price':
Items (Rs. in crore)
(i) Private final consumption expenditure: 900
(ii) Depreciation: 100
(iii) Net factor income to abroad: (-) 10
(iv) Closing stock: 20
(v) Government final consumption expenditure: 400
(vi) Net indirect taxes: 50
(vii) Opening stock: 20
(viii) Net domestic fixed capital formation: 180
(ix) Net exports: 15

Answer:
Gross Domestic Product at Market Price = Private final consumption expenditure + Government final consumption expenditure + Net domestic fixed capital formation + Change in stocks (Closing stock - Opening stock) + Depreciation + Net exports
\( = \text{Rs. } 900 \text{ crore} + \text{Rs. } 400 \text{ crore} + \text{Rs. } 180 \text{ crore} + (\text{Rs. } 20 \text{ crore} - \text{Rs. } 20 \text{ crore}) + \text{Rs. } 100 \text{ crore} + \text{Rs. } 15 \text{ crore} \)
\( = \text{Rs. } 900 \text{ crore} + \text{Rs. } 400 \text{ crore} + \text{Rs. } 180 \text{ crore} + \text{Rs. } 0 \text{ crore} + \text{Rs. } 100 \text{ crore} + \text{Rs. } 15 \text{ crore} \)
\( = \text{Rs. } 1,595 \text{ crore} \)
Gross domestic product at market price = Rs. 1,595 crore.

Question. Find out 'Gross National Product at Market Price':
Items (Rs. in crore)
(i) Net indirect taxes: 35
(ii) Private final consumption expenditure: 600
(iii) Consumption of fixed capital: 50
(iv) Closing stock: 10
(v) Government final consumption expenditure: 250
(vi) Net domestic fixed capital formation: 200
(vii) Net factor income to abroad: (-) 15
(viii) Net imports: 20
(ix) Opening stock: 10

Answer:
Gross National Product at Market Price = Private final consumption expenditure + Government final consumption expenditure + Net domestic fixed capital formation + Change in stocks (Closing stock - Opening stock) + Consumption of fixed capital - Net imports - Net factor income to abroad
\( = \text{Rs. } 600 \text{ crore} + \text{Rs. } 250 \text{ crore} + \text{Rs. } 200 \text{ crore} + (\text{Rs. } 10 \text{ crore} - \text{Rs. } 10 \text{ crore}) + \text{Rs. } 50 \text{ crore} - \text{Rs. } 20 \text{ crore} - (-) \text{Rs. } 15 \text{ crore} \)
\( = \text{Rs. } 600 \text{ crore} + \text{Rs. } 250 \text{ crore} + \text{Rs. } 200 \text{ crore} + \text{Rs. } 0 \text{ crore} + \text{Rs. } 50 \text{ crore} - \text{Rs. } 20 \text{ crore} + \text{Rs. } 15 \text{ crore} \)
\( = \text{Rs. } 1,095 \text{ crore} \)
Gross national product at market price = Rs. 1,095 crore.

Question. Calculate 'Gross Domestic Product at Market Price' by (a) Production Method, and (b) Income Method:
Items (Rs. in crore)
(i) Intermediate Consumption of:
(a) Primary sector: 500
(b) Secondary sector: 400
(c) Tertiary sector: 300
(ii) Value of Output of:
(a) Primary sector: 1,000
(b) Secondary sector: 900
(c) Tertiary sector: 700
(iii) Rent: 10
(iv) Emoluments of employees: 400
(v) Mixed income: 650
(vi) Operating surplus: 300
(vii) Net factor income from abroad: (-) 20
(viii) Interest: 5
(ix) Consumption of fixed capital: 40
(x) Net indirect tax: 10

Answer:
(a) Production Method:
Gross Domestic Product at Market Price = (Value of output of primary sector - Intermediate consumption of primary sector) + (Value of output of secondary sector - Intermediate consumption of secondary sector) + (Value of output of tertiary sector - Intermediate consumption of tertiary sector)
\( = (\text{Rs. } 1,000 \text{ crore} - \text{Rs. } 500 \text{ crore}) + (\text{Rs. } 900 \text{ crore} - \text{Rs. } 400 \text{ crore}) + (\text{Rs. } 700 \text{ crore} - \text{Rs. } 300 \text{ crore}) \)
\( = \text{Rs. } 500 \text{ crore} + \text{Rs. } 500 \text{ crore} + \text{Rs. } 400 \text{ crore} \)
\( = \text{Rs. } 1,400 \text{ crore} \)
(b) Income Method:
Gross Domestic Product at Market Price = Emoluments of employees + Operating surplus + Mixed income + Consumption of fixed capital + Net indirect tax
\( = \text{Rs. } 400 \text{ crore} + \text{Rs. } 300 \text{ crore} + \text{Rs. } 650 \text{ crore} + \text{Rs. } 40 \text{ crore} + \text{Rs. } 10 \text{ crore} \)
\( = \text{Rs. } 1,400 \text{ crore} \)
Gross domestic product at market price (by production and income methods) = Rs. 1,400 crore.

Question. From the following data, calculate 'Net National Product at Market Price' by (a) Expenditure Method, and (b) Income Method:
Items (Rs. in lakh)
(i) Personal consumption expenditure: 700
(ii) Wages and salaries: 700
(iii) Employers' contribution to social security schemes: 100
(iv) Gross business fixed investment: 60
(v) Gross residential construction investment: 60
(vi) Gross public investment: 40
(vii) Inventory investment: 20
(viii) Profit: 100
(ix) Government purchases of goods and services: 200
(x) Rent: 50
(xi) Exports: 40
(xii) Imports: 20
(xiii) Interest: 40
(xiv) Mixed income of the self-employed: 100
(xv) Net factor income from abroad: (-) 10
(xvi) Depreciation: 0
(xvii) Indirect taxes: 20
(xviii) Subsidies: 10

Answer:
(a) Expenditure Method:
Net National Product at Market Price = Personal consumption expenditure + Gross business fixed investment + Gross public investment + Gross residential construction investment + Inventory investment + Government purchases of goods and services + Exports - Imports + Net factor income from abroad
\( = \text{Rs. } 700 \text{ lakh} + \text{Rs. } 60 \text{ lakh} + \text{Rs. } 40 \text{ lakh} + \text{Rs. } 60 \text{ lakh} + \text{Rs. } 20 \text{ lakh} + \text{Rs. } 200 \text{ lakh} + \text{Rs. } 40 \text{ lakh} - \text{Rs. } 20 \text{ lakh} + (-) \text{Rs. } 10 \text{ lakh} \)
\( = \text{Rs. } 700 \text{ lakh} + \text{Rs. } 60 \text{ lakh} + \text{Rs. } 40 \text{ lakh} + \text{Rs. } 60 \text{ lakh} + \text{Rs. } 20 \text{ lakh} + \text{Rs. } 200 \text{ lakh} + \text{Rs. } 40 \text{ lakh} - \text{Rs. } 20 \text{ lakh} - \text{Rs. } 10 \text{ lakh} \)
\( = \text{Rs. } 1,090 \text{ lakh} \)
(b) Income Method:
Net National Product at Market Price = Wages and salaries + Employers' contribution to social security schemes + Profit + Rent + Interest + Mixed income of the self-employed + Net factor income from abroad + Indirect taxes - Subsidies
\( = \text{Rs. } 700 \text{ lakh} + \text{Rs. } 100 \text{ lakh} + \text{Rs. } 100 \text{ lakh} + \text{Rs. } 50 \text{ lakh} + \text{Rs. } 40 \text{ lakh} + \text{Rs. } 100 \text{ lakh} + (-) \text{Rs. } 10 \text{ lakh} + \text{Rs. } 20 \text{ lakh} - \text{Rs. } 10 \text{ lakh} \)
\( = \text{Rs. } 700 \text{ lakh} + \text{Rs. } 100 \text{ lakh} + \text{Rs. } 100 \text{ lakh} + \text{Rs. } 50 \text{ lakh} + \text{Rs. } 40 \text{ lakh} + \text{Rs. } 100 \text{ lakh} - \text{Rs. } 10 \text{ lakh} + \text{Rs. } 20 \text{ lakh} - \text{Rs. } 10 \text{ lakh} \)
\( = \text{Rs. } 1,090 \text{ lakh} \)
Net national product at market price (by expenditure and income methods) = Rs. 1,090 lakh.

Question. From the following data, calculate (a) Gross Domestic Product at Factor Cost, and (b) Factor Income to Abroad:
Items (Rs. in crore)
(i) Compensation of employees: 1,000
(ii) Profits: 200
(iii) Dividends: 80
(iv) Gross national product at market price: 1,800
(v) Rent: 250
(vi) Interest: 200
(vii) Gross domestic capital formation: 300
(viii) Net fixed capital formation: 200
(ix) Change in stock: 50
(x) Factor income from abroad: 80
(xi) Net indirect taxes: 120

Answer:
(a) Gross Domestic Product at Factor Cost = Compensation of employees + Profits + Rent + Interest + Consumption of fixed capital
(Consumption of fixed capital = Gross domestic capital formation - (Net fixed capital formation + Change in stock))
\( = \text{Rs. } 1,000 \text{ crore} + \text{Rs. } 200 \text{ crore} + \text{Rs. } 250 \text{ crore} + \text{Rs. } 200 \text{ crore} + [\text{Rs. } 300 \text{ crore} - (\text{Rs. } 200 \text{ crore} + \text{Rs. } 50 \text{ crore})] \)
\( = \text{Rs. } 1,000 \text{ crore} + \text{Rs. } 200 \text{ crore} + \text{Rs. } 250 \text{ crore} + \text{Rs. } 200 \text{ crore} + \text{Rs. } 50 \text{ crore} \)
\( = \text{Rs. } 1,700 \text{ crore} \)
(b) Gross National Product at Factor Cost = Gross national product at market price - Net indirect taxes
\( = \text{Rs. } 1,800 \text{ crore} - \text{Rs. } 120 \text{ crore} = \text{Rs. } 1,680 \text{ crore} \)
Net Factor Income from Abroad = Gross national product at factor cost - Gross domestic product at factor cost
\( = \text{Rs. } 1,680 \text{ crore} - \text{Rs. } 1,700 \text{ crore} = (-) \text{Rs. } 20 \text{ crore} \)
Net Factor Income from Abroad = Factor income from abroad - Factor income to abroad
Or, Factor Income to Abroad = Factor income from abroad - Net factor income from abroad
\( = \text{Rs. } 80 \text{ crore} - (-) \text{Rs. } 20 \text{ crore} \)
\( = \text{Rs. } 80 \text{ crore} + \text{Rs. } 20 \text{ crore} = \text{Rs. } 100 \text{ crore} \)
(a) Gross domestic product at factor cost = Rs. 1,700 crore.
(b) Factor income to abroad = Rs. 100 crore.

Question. Calculate (a) Gross Domestic Product at Market Price, and (b) Factor Income from Abroad from the following data:
Items (Rs. in crore)
(i) Profits: 550
(ii) Exports: 40
(iii) Compensation of employees: 1,600
(iv) Gross national product at factor cost: 3,000
(v) Net current transfers from rest of the world: 90
(vi) Rent: 300
(vii) Interest: 400
(viii) Factor income to abroad: 120
(ix) Net indirect taxes: 300
(x) Net domestic capital formation: 650
(xi) Gross fixed capital formation: 700
(xii) Change in stock: 50

Answer:
(a) Gross Domestic Product at Market Price = Compensation of employees + Profits + Rent + Interest + Net indirect taxes + Consumption of fixed capital
(Consumption of fixed capital = Gross fixed capital formation + Change in stock - Net domestic capital formation)
\( = \text{Rs. } 1,600 \text{ crore} + \text{Rs. } 550 \text{ crore} + \text{Rs. } 300 \text{ crore} + \text{Rs. } 400 \text{ crore} + \text{Rs. } 300 \text{ crore} + (\text{Rs. } 700 \text{ crore} + \text{Rs. } 50 \text{ crore} - \text{Rs. } 650 \text{ crore}) \)
\( = \text{Rs. } 1,600 \text{ crore} + \text{Rs. } 550 \text{ crore} + \text{Rs. } 300 \text{ crore} + \text{Rs. } 400 \text{ crore} + \text{Rs. } 300 \text{ crore} + \text{Rs. } 100 \text{ crore} \)
\( = \text{Rs. } 3,250 \text{ crore} \)
(b) Gross National Product at Market Price = Gross national product at factor cost + Net indirect taxes
\( = \text{Rs. } 3,000 \text{ crore} + \text{Rs. } 300 \text{ crore} = \text{Rs. } 3,300 \text{ crore} \)
Net Factor Income from Abroad = Gross national product at market price - Gross domestic product at market price
\( = \text{Rs. } 3,300 \text{ crore} - \text{Rs. } 3,250 \text{ crore} = \text{Rs. } 50 \text{ crore} \)
Net Factor Income from Abroad = Factor income from abroad - Factor income to abroad
Or, Factor Income from Abroad = Net factor income from abroad + Factor income to abroad
\( = \text{Rs. } 50 \text{ crore} + \text{Rs. } 120 \text{ crore} = \text{Rs. } 170 \text{ crore} \)
(a) Gross domestic product at market price = Rs. 3,250 crore.
(b) Factor income from abroad = Rs. 170 crore.

Question. From the following data relating to a firm, calculate its Net Value Added at Factor Cost:
Items (Rs. in crore)
(i) Subsidy: 40
(ii) Sales: 800
(iii) Depreciation: 30
(iv) Exports: 100
(v) Closing stock: 20
(vi) Opening stock: 50
(vii) Intermediate purchases: 500
(viii) Purchase of machinery used in factory: 200
(ix) Import of raw material: 60

Answer:
Net Value Added at Factor Cost = Sales + Change in stock - Intermediate purchases - Depreciation - Net indirect taxes (Indirect taxes - Subsidy)
\( = \text{Rs. } 800 \text{ crore} + (\text{Rs. } 20 \text{ crore} - \text{Rs. } 50 \text{ crore}) - \text{Rs. } 500 \text{ crore} - \text{Rs. } 30 \text{ crore} - (\text{Rs. } 0 \text{ crore} - \text{Rs. } 40 \text{ crore}) \)
\( = \text{Rs. } 800 \text{ crore} - \text{Rs. } 30 \text{ crore} - \text{Rs. } 500 \text{ crore} - \text{Rs. } 30 \text{ crore} + \text{Rs. } 40 \text{ crore} \)
\( = \text{Rs. } 280 \text{ crore} \)
Net value added at factor cost = Rs. 280 crore.