Question
Calculate Gross National Product at Factor Cost from the following data by:
  1. Income method.
  2. Expenditure method.
S.No.
Contents
(in crore)
$(i)$
Private Final Consumption Expenditure
$1,000$
$(ii)$
Net Domestic Capital Formation
$200$
$(iii)$
Profits
$400$
$(iv)$
Compensation of Employees
$800$
$(v)$
Rent
$250$
$(vi)$
Government Final Consumption Expenditure
$500$
$(vii)$
Consumption of Fixed Capital
$60$
$(viii)$
Interest
$150$
$(ix)$
NFIA
$(-)10$
$(x)$
Net Exports
$-20$
$(xi)$
Net Indirect Tax
$80$

Answer

  1. By income method:
$GNP_{FC} =$ Compensation of Employees $+\ ($Profits $+$ Rent $+$ Interest$)\ +$ Consumption of Fixed Capital $+$ Net Factor Income from Abroad
$= 800 + (400 + 250 + 150) + 60 + (- 10)$
$= ₹ 1,650$ crore
  1. By expenditure method:
$GNP_{FC} =$ Private Final Consumption Expenditure $+$ Government Final consumption Expenditure $+$ Net Domestic Capital Formation $+$ Consumption of Fixed Capital $+$ Net Expoft $-$ Net Indirect Taxes $+$ Net Factor Income from Abroad
$= 1000 + 500 + 200 + 60 + (-20) - 80 + (- 10)$
$= ₹ (1,760 - 110)$ crore
$= ₹ 1,650$ crore

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