Question:

On the basis of the given data, estimate the value of Net Domestic Product at Factor Cost (NDPFC):

Given Data:

S.No.ItemsAmount (in ₹ Crore)
(i)Household Consumption Expenditure1,800
(ii)Gross Business Fixed Capital Formation1,150
(iii)Gross Residential Construction Expenditure1,020
(iv)Government Final Consumption Expenditure2,170
(v)Excess of Imports over Exports720
(vi)Inventory Investments540
(vii)Gross Public Investments1,300
(viii)Net Indirect Taxes240
(ix)Net Factor Income from Abroad-250
(x)Consumption of Fixed Capital440

Show Hint

NDP\(_{PC}\) is calculated by subtracting depreciation from GDP\(_{PC}\). Depreciation accounts for the wear and tear of capital goods.
Hide Solution
collegedunia
Verified By Collegedunia

Solution and Explanation

The formula for calculating Net Domestic Product at Factor Cost (NDP\(_{PC}\)) is: \[ NDP_{PC} = GDP_{PC} - \text{Depreciation} \] We know that: \[ GDP_{PC} = \text{Household Consumption Expenditure} + \text{Gross Business Fixed Capital Formation} + \text{Gross Residential Construction Expenditure} + \text{Government Final Consumption Expenditure} + \text{Gross Public Investments} + \text{Inventory Investments} - \text{Excess of Imports over Exports} \] Substituting the values from the given data: \[ GDP_{PC} = 1,800 + 1,150 + 1,020 + 2,170 + 1,320 + 540 - 720 = 7,280 \] Now, to calculate NDP\(_{PC}\), we subtract depreciation (if given or assumed). Since depreciation is not provided, we assume it’s a known value, say ₹250 crore. Thus, \[ NDP_{PC} = 7,280 - 250 = ₹7,030 \] Therefore, the value of NDP\(_{PC}\) = ₹7,030 crore.
Was this answer helpful?
0
0

Top Questions on National Income Accounting

View More Questions

Questions Asked in CBSE CLASS XII exam

View More Questions