Comparison-Value Added method vs Income Method of Measurement of National Income
Example 24
From the following information, estimate:
(i) Value of output;
(ii) Net value added at factor cost;
(iii) Prove that income generated is equal to net value added at factor cost.
Particulars | ₹ in Crores |
(i) Increase in unsold stock | 600 |
(ii) Sales | 10,625 |
(iii) Purchase of raw materials | 2,625 |
(iv) Indirect Taxes | 1,200 |
(v) Subsidies | 400 |
(vi) Operating surplus | 3,740 |
(vii) Mixed incomes | 100 |
(viii) Wages and Salaries | 3,460 |
(ix) Depreciation | 500 |
Answer
In this question, we have to Calculate National Income using both
Value Added Method and Income Method
Value Added Method
Income Method
Calculation of National Income | |
Different Factor Incomes | |
Operating Surplus | 3740 |
Compensation to Employees | 3460 |
Mixed Income | 100 |
Total (Domestic Income NDP _{ FC } ) | 7300 |
Add NFIA | 0 |
NNP FC (National income) | 7300 |
Question 21
From the data given below, prove that "Net Value Added at Factor Cost' is equal to 'Income Generated.
Particulars | Rs in crores |
(i) Opening stock | 200 |
(ii) Closing stock | 400 |
(iii) Purchase of raw materials | 300 |
(iv) Sales | 1,200 |
(v) Corporate tax | 100 |
(vi) Undistributed profits | 50 |
(vii) Dividends | 50 |
(viii) Rent | 150 |
(ix) Interest | 100 |
(x) Depreciation | 200 |
(xi) Indirect taxes | 150 |
(xii) Subsidies | 50 |
(xiii) Wages and salaries | 350 |
Answer
Income Method
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