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Question

From the following data, calculate National Income by Income method and Expenditure method:
ItemRs. in crores
(i)Compensation of employees700
(ii)Government final consumption expenditure750
(iii)Net factor income from abroad(-) 10
(iv)Net exports(-) 15
(v)Profits600
(vi)Net indirect taxes60
(vii)Mixed income of self-employed350
(viii)Rent200
(ix)Interest310
(x)Private final consumption expenditure1100
(xi)Net domestic capital formation385
(xii)Consumption of fixed capital65

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Solution

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.

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