Question

Calculate Net National Product at Factor Cost and Gross National Disposable Income from the following:

$\begin{array}{cc}& \\ & \text{(Rs in crores)}\\ \text{(i) Net current transfers to}& 10\\ \text{the rest of the world}& \\ \text{(ii) Savings of non-departmental}& 60\\ \text{enterprises}& \\ \text{(iii) Net indirect tax}& 90\\ \text{(iv) Income from property and enterpreneurship}& 80\\ \text{accruing to the government administrative departments}& \\ \text{(v) Consumption of fixed capital}& 70\\ \text{(vi) Personal tax}& 100\\ \text{(vii) Corporation tax}& 40\\ \text{(viii) National debt interest}& 30\\ \text{(ix) Current transfer payments by Government}& 50\\ \text{(x) Retained earnings of private corporate sector}& 10\\ \text{(xi) Personal disposable income}& 1,100\end{array}$

Answer 1

(a) Net National Product at Factor Cost

$NN{P}_{FC}$ = Personal disposable income + Personal tax + Corporation tax + Retained earnings of private corporate sector - National debt interest - Current transfer payments by the government + Net current transfers to the rest of the world + Income from property and entrepreneurship accuring to government administrative departments + Savings of non-departmental enterprise

= (xi)+ (vi)+ (vii)+ (x) - (viii)- (ix) +(i)+ (iv)+ (ii)

= 1,100+100+40+10-30- 50+10+80+60

=1,400-80 = 1,320 crores

(b) Gross National Disposable Income

GNDI = $NN{P}_{FC}$+ Consumption of fixed capital + Net industry tax - Net current transfer to the rest of the world

= $NN{P}_{FC}$ + (v) + (iii) - (i)

=1,320+70+90-10 = 1,480-10 = 1,470 crores