Question
Calculate Gross National Product at Factor Cost by,
  1. Income method.
  2. Expenditure method from the following data:
S.No.
Contents
(in crore)
(i)
Net Domestic Capital Formation
500
(ii)
Compensation of Employees
1,850
(iii)
Consumption of Fixed Capital
100
(iv)
Government Final Consumption Expenditure
1,100
(v)
Private Final Consumption Expenditure
2,600
(vi)
Rent
400
(vii)
Dividend
200
(viii)
Interest
500
(ix)
Net Exports
(-)100
(x)
Profit
1,100
(xi)
Net Factor Income from Abroad
(-)50
(xii)
Net Indirect Taxes
250

Answer

  1. By income method:
$GNP_{FC} =$ Compensation of Employees + (Rent+Interest+Profits) + Net Factor Income from Abroad + Consumption of Fixed Capital
$= 1850 + (400 + 500 + 1,100) + (-50) + 100$
$= ₹ 3,900 $crore
  1. By expenditure method:
$GNP_{FC} =$ Private Final Consumption Expenditure + Government Final Consumption Expenditure + Net Domestic Capital Formation + Consumption of Fixed Capital + Net Export +Net Factor Income from Abroad - Net Indirect Taxes
$= 2,600 + 1,100 + 500 + 100 + (-100) + (-50) - 250$
$= 4,300 - 400$
$= ₹ 3,900$ crore

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