Question

Gross national product at market prices of an economy is $Rs.65,000$ crores. The capital stock of the economy is valued at $Rs.1,20,000$ crores, which depreciates at the rate of $10$ per annum. Indirect taxes amount to $Rs.6,000$ crores and subsidies amount to $Rs.1,000$ crores. Estimate national income of the economy.

Answer 1

Depreciation: 10% * 120000 = 12000
Formula: National Income or NNP at FC = GNP at MP - Depreciation - Indirect Tax + Subsidies
= 65000 - 12000 - 6000 + 1000
= Rs 48000 crores.