Question:
On the basis of the data given below, estimate the value of National Income (NNPFC) 
On the basis of the data given below, estimate the value of National Income (NNPFC)
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National Income is calculated by adding the various economic components, accounting for depreciation (consumption of fixed capital) and taxes, and adjusting for net income from abroad.
Updated On: Jun 19, 2025
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Solution and Explanation
To estimate the National Income (NNP at factor cost), we can use the following formula:
Formula:
National Income (NNP) = Private final consumption expenditure + Government final consumption expenditure + Net exports + Net indirect taxes + Net factor income from abroad + Gross domestic fixed capital formation - Consumption of fixed capital
1. Given Values:
- Private final consumption expenditure: ₹2,000 crore
- Government final consumption expenditure: ₹1,500 crore
- Gross domestic fixed capital formation: ₹1,000 crore
- Addition to stock: ₹400 crore (this is included in the Gross domestic fixed capital formation)
- Consumption of fixed capital: ₹50 crore
- Net factor income from abroad: ₹100 crore
- Net indirect taxes: ₹200 crore
- Net Exports: ₹700 crore
2. Calculating the National Income (NNP):
Substituting the values in the formula:
National Income (NNP) = ₹2,000 + ₹1,500 + ₹700 + ₹200 + ₹100 + ₹1,000 - ₹50
National Income (NNP) = ₹5,450 crore
Final Answer:
The National Income (NNP at factor cost) is ₹5,450 crore.
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