Question

Calculate Domestic Income (NDP_FC) from the data given below:

S. No.	Particulars	Amount (in ₹ lakh)
(i)	Gross National Product at Market Price (GNPMP)	2,500
(ii)	Consumption of Fixed Capital (Depreciation)	200
(iii)	Goods and Services Tax (Indirect Tax)	20
(iv)	Subsidies	50
(v)	Net Factor Income from Abroad (NFIA)	50
(vi)	Changes in Stocks	30
(vii)	Unexpected Loss of a Fixed Asset	500

Hint:

While calculating NDP\textsubscript{FC}, remember to subtract NFIA, depreciation, and net indirect taxes from GNP\textsubscript{MP}. Be careful with signs when subsidies are more than indirect taxes!

Answer 1

To find Domestic Income (NDP_FC), we apply the following formula:

Formula:
NDP_FC = GNP_MP - NFIA - Depreciation - Net Indirect Taxes

Step 1: Calculate Net Indirect Taxes (NIT):
NIT = Indirect Taxes - Subsidies = 20 - 50 = -30

Step 2: Apply the values to the formula:
NDP_FC = 2500 - 50 - 200 - (-30)
   = 2500 - 250 + 30
   = 2280 lakh

Note:
- Changes in stocks and unexpected loss are not used in this computation.
- NDP_FC is also known as Domestic Income.