Example 1
Calculate Domestic Income
GNPMP 6000
Subsidies 200
Depreciation 100
NFIA 400
Indirect Taxes 300
-a-
We are given GNPMP
We have to calculate Domestic Income i.e NDPFC
From GNPMP we have to go to NDPFC
GNPMP 6000
Less Dep 100
NNPMP 5900
Less NFIA 400
NDPMP 5500
Less Net Indirect Taxes 100 (300-200)
NDPFC 5400
Working Note
Net Indirect Taxes
= Taxes - Subsidy
= 300-200
= 100
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Example 2
Calculate GNPFC
NDPMP 25000
Depreciation 5000
Subsidies 30
Factor Income from Abroad 400
Factor Income to Abroad 600
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NDPMP 25000
Add Dep 5000
GDPMP 30000
Less Net Indirect Taxes -30 (0-30)
GDPFC 30030
Add NFIA -200 (400-600)
GNPFC 29830
Working Note 1
Net Indirect Taxes
= Taxes - Subsidy
= 0-200
= -200
Working Note 2
NFIA
= Factor Income from Abroad - Factor Income to Rest of world
= 400-600
= -200
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Practicals
Question 1
Calculate GNPFC (Rs in crores)
NDPMP 80,000
NFIA -200
Depreciation 4950
Subsidies 1770
Indirect Tax 10,600
-a-
NDPMP 80,000
Add Dep 4950
GDPMP 84,950
Add NFIA -200
GNPMP 84,750
Less Indirect Tax 10,600
Add Subsidies 1770
GNPFC 75,920
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Question 2
Calculate the Domestic Income (Rs in crores)
GNPMP 58,350
Indirect Tax 2590
Subsidies 1540
Depreciation 1625
NFIA -240
-a-
Domestic Income = NDPFC
GNPMP 58,350
Less Dep 1625
NNPMP 56,725
Less NFIA -240
NDPMP 56,965
Less Indirect Tax 2590
Add Subsidies 1540
NDPFC 55,915
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Question 3
Calculate GDPMP
National Income 6700
Consumption of Fixed Capital 180
Factor income from abroad 100
Indirect Taxes 130
Subsidies 70
Factor income to abroad 150
-a-
NNPFC 6700
Add Dep 180
GNPFC 6880
Less NFIA -50
GDPFC 6930
Add Net Indirect Tax 60
GDPMP 6990
Working Note 1
NFIA = Factor income from abroad - Factor income to abroad
NFIA = 100 - 150
NFIA = -50
Working Note 2
Net Indirect Tax = Indirect Tax - Subsidy
= 130 - 70
= 60
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Question 4
Calculate Domestic Income
GNPFC 2700
Indirect Tax 60
Factor income from abroad 150
Factor income to abroad 180
Replacement of Fixed capital 150
-a-
Domestic Income = NDPFC
GNPFC 2700
Less Dep 150
NNPFC 2550
Less NFIA -30
NDPFC 2580
Working Note
NFIA = Factor income from abroad - Factor income to abroad
NFIA = 150 - 180
NFIA = -30
Replacement of Fixed Capital is Depreciation.
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Question 5
Gross National Product at market prices of an economy is Rs65,000 crores.
The capital stock of the economy is valued at Rs1,20,000 crores, which depreciates at the rate of 10% per annum.
Indirect taxes amount to Rs6,000 crores and subsidies amount to Rs1,000 crores.
Estimate National Income of the economy.
-a-
Capital Stock = 1,20,000
Depreciation rate = 10%
Dep = 12,000
National Income = NNPFC
GNPMP 65,000
Less Dep 12,000
NNPMP 53,000
Less Net Indirect Tax 5000
NNPFC 48,000
Working Note
Net Indirect Tax = Indirect Tax - Subsidies
= 6000 - 1000
= 5000
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Calculate Domestic Income.
GNPMP 6000
Subsidies 200
Depreciation 100
NFIA 400
Indirect Taxes 300
-a-
We are given GNPMP
We have to calculate Domestic Income i.e NDPFC
From GNPMP we have to go to NDPFC
GNPMP 6000
Less Dep 100
NNPMP 5900
Less NFIA 400
NDPMP 5500
Less Net Indirect Taxes 100 (300-200)
NDPFC 5400
Working Note
Net Indirect Taxes
= Taxes - Subsidy
= 300-200
= 100
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Example 3
Calculate GNPFC.
NDPMP 25000
Depreciation 5000
Subsidies 30
Factor Income from Abroad 400
Factor Income to Abroad 600
-a-
NDPMP 25000
Add Dep 5000
GDPMP 30000
Less Net Indirect Taxes -30 (0-30)
GDPFC 30030
Add NFIA -200 (400-600)
GNPFC 29830
Working Note 1
Net Indirect Taxes
= Taxes - Subsidy
= 0-200
= -200
Working Note 2
NFIA
= Factor Income from Abroad - Factor Income to Rest of world
= 400-600
= -200
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Practicals
Question 1
Calculate GNPFC(Rs in crores)
NDPMP 80,000
NFIA -200
Depreciation 4950
Subsidies 1770
Indirect Tax 10,600
-a-
NDPMP 80,000
Add Dep 4950
GDPMP 84,950
Add NFIA -200
GNPMP 84,750
Less Indirect Tax 10,600
Add Subsidies 1770
GNPFC 75,920
Question 2
Calculate the Domestic Income (Rs in crores)
GNPMP 58,350
Indirect Tax 2590
Subsidies 1540
Depreciation 1625
NFIA -240
-a-
Domestic Income = NDPFC
GNPMP 58,350
Less Dep 1625
NNPMP 56,725
Less NFIA -240
NDPMP 56,965
Less Indirect Tax 2590
Add Subsidies 1540
NDPFC 55,915
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Question 3
Calculate GDPMP.
National Income 6700
Consumption of Fixed Capital 180
Factor income from abroad 100
Indirect Taxes 130
Subsidies 70
Factor income to abroad 150
-a-
NNPFC 6700
Add Dep 180
GNPFC 6880
Less NFIA -50
GDPFC 6930
Add Net Indirect Tax 60
GDPMP 6990
Working Note 1
NFIA = Factor income from abroad - Factor income to abroad
NFIA = 100 - 150
NFIA = -50
Working Note 2
Net Indirect Tax = Indirect Tax - Subsidy
= 130 - 70
= 60
Question 4
Calculate Domestic Income.
GNPFC 2700
Indirect Tax 60
Factor income from abroad 150
Factor income to abroad 180
Replacement of Fixed capital 150
-a-
Domestic Income = NDPFC
GNPFC 2700
Less Dep 150
NNPFC 2550
Less NFIA -30
NDPFC 2580
Working Note
NFIA = Factor income from abroad - Factor income to abroad
NFIA = 150 - 180
NFIA = -30
Replacement of Fixed Capital is Depreciation.
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Question 5
Gross National Product at market prices of an economy is Rs65,000 crores.
The capital stock of the economy is valued at Rs1,20,000 crores, which depreciates at the rate of 10% per annum.
Indirect taxes amount to Rs6,000 crores and subsidies amount to Rs1,000 crores.
Estimate National Income of the economy.
-a-
Capital Stock = 1,20,000
Depreciation rate = 10%
Dep = 12,000
National Income = NNPFC
GNPMP 65,000
Less Dep 12,000
NNPMP 53,000
Less Net Indirect Tax 5000
NNPFC 48,000
Working Note
Net Indirect Tax = Indirect Tax - Subsidies
= 6000 - 1000
= 5000
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Made by
Davneet Singh
Davneet Singh is a graduate from Indian Institute of Technology, Kanpur. He has been teaching from the past 12 years. He provides courses for Maths and Science at Teachoo.