Question

From the following data, Calculate Personal Income and Personal Disposable Income.

$\begin{array}{cc}& \text{Rs (Crores)}\\ \text{(a) Net Domestic Product at Factor Cost}& 8,000\\ \text{(b) Net Factor Income from Abroad}& 200\\ \text{(c) Undistributed Profit}& 1,000\\ \text{(d) Corporate Tax}& 500\\ \text{(e) Interest Received by Households}& 1,500\\ \text{(f) Transfer Paid by Households}& 1,200\\ \text{(g) Transfer Income}& 300\\ \text{(h) Personal Tax}& 500\end{array}$

Answer 1

Private Income = Net Domestic Product + NFIA + Transfer payment + Interest received

= 8,000 + 200 + 300 + 1,500 = 10,000 crores

Personal Income = Private Income - Undistributed Profit - Corporate tax

= 10,000 - 1,000 - 500 = 8,500 crores

Personal Disposal Income = Personal Income - Direct Tax - Interest paid

= 8,500 - 500 - 1,200 = 6,800 crores