Question
Explain the production method of estimating national income.

Answer

Steps of estimating national income in production method-
  1. Classify the production units into industrial sectors.
  2. Estimate value added by each industrial sector:
GVAmp = value of output – intermediale cost.
  1. Take the sum of value added by all the industrial sectors to get GDPmp.
  2. Deduct consumption of fixed capital and net indirect tax to arrive at NDPfc.
  3. Add. Net Factor Income from abroad to NDPfc to get NNPfc/national income.

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S. No Particulars $(₹)$ In Crore
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$2.$ Mixed income of self$-$employed. $160$
$3.$ Operating surplus. $600$
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$5.$ Gross capital formation. $330$
$6.$ Change in stocks. $25$
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$1.$
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$2.$
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$3.$
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