S. No. | Contents | (Rs.) in crores |
(i) | Compensation of Employees | 1,000 |
(ii) | Net Exports | (-) 50 |
(iii) | Profits | 400 |
(iv) | Interest | 250 |
(v) | Rent | 150 |
(vi) | Gross National Product at Factor Cost | 1,850 |
(vii) | Gross Domestic Capital Formation | 220 |
(viii) | Net Fixed Capital Formation | 150 |
(ix) | Change in Stock | 20 |
(x) | Factor Income from Abroad | 30 |
(xi) | Net Indirect Taxes | 100 |
(i) Profits earned by a branch of State Bank of India in England. |
(ii) Salary of Indian residents working in Russian Embassy in India. |
(iii) Compensation of employees to the residents of Japan working in Indian embassy in Japan. |
Answer:
By Income Method National Domestic Product at Factor Cost\[(ND{{P}_{FC}})\] = Compensation of Employees + Profits + Interest + Rent =1,000+400+250+150 =Rs. 1,800 crore Gross Domestic Product at Market Price\[(GD{{P}_{MP}})=ND{{P}_{Fc}}\] = + Net Indirect Taxes + Consumption of Fixed Capital* = 1,800+100+50=Rs. 1,950 crore Gross National Product at Market price\[(GN{{P}_{MP}})\]\[(GD{{P}_{MP}})=ND{{P}_{Fc}}\] =+ Net Indirect Taxes =1,850+100 = Rs. 1,950 crore Net Factor Income from Abroad (NFIA) =\[GN{{P}_{MP}}-GD{{P}_{MP}}=1,950-1,950=0\] Now we know that, NFIA = Factor Income From Abroad - Factor Income to Abroad = 30 - Factor Income to Abroad \[\therefore \]Factor Income to Abroad = Rs.30crores Note: *Consumption of Fixed Capital = Gross Domestic Capital Formation - Change in Stock ? Net Fixed Capital Formation \[=220-20-150=50\] Or (i) Profits earned by a branch of State Bank of India in England is not a part of domestic factor income of India because the branch of State Bank of India in England is not a part of domestic territory of India. (ii) Salary of Indian residents working in Russian Embassy in India is not included in domestic factor income of India because Russian embassy is not a part of domestic territory of India. (iii) Compensation of employees to residents of Japan working in Indian Embassy in Japan is a part of domestic factor income of India because Indian embassy in Japan is a part of domestic territory of India.
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