Question

From the following data, calculate National Income by Income method and Expenditure method:

	Item	Rs. in crores
(i)	Compensation of employees	700
(ii)	Government final consumption expenditure	750
(iii)	Net factor income from abroad	(-) 10
(iv)	Net exports	(-) 15
(v)	Profits	600
(vi)	Net indirect taxes	60
(vii)	Mixed income of self-employed	350
(viii)	Rent	200
(ix)	Interest	310
(x)	Private final consumption expenditure	1100
(xi)	Net domestic capital formation	385
(xii)	Consumption of fixed capital	65

Answer 1

National income (income method) = Compensation of employees + Profits + Rent + Interest + Mixed income of self employed - Net factor income to abroad = 700 + 600 + 200 + 310 + 350 - 10 = 2150 crores

National income (expenditure method) = Govt. final consumption expenditure+Net domestic capital formation+Net exports+Private final consumption expenditure-Net indirect taxes-Net factor income to abroad=750 + 385 - 15 + 1100 - 60 - 10 = 2150 crores.