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Calculate NDP at FC by expenditure …

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Calculate NDP at FC by expenditure method and GDP at MP by income method. Particulars (in crores) (i) Gross fixed capital formation 130 (ii) Private final consumption expenditure 510 (iii) Mixed income of the self employed 280 (iv) Net factor income from ROW (–) 5 (v) Exports 50 (vi) Imports 60 (vii) Compensation of employees 240 (viii) Government final consumption expenditure 70 (ix) Consumption of Fixed Capital 40 (x) Indirect tax 90 (xi) Subsidies 10 (xii) Rent, Interest and profit 90 (xiii) Change in stock 30 (xiv) Interest on national debt 10
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To calculate the Net Domestic Product at Factor Cost (NDP at FC) using the expenditure method, we need to sum up all the expenditures on final goods and services produced within the domestic territory.

NDP at FC = Gross Fixed Capital Formation (GFCF) + Private Final Consumption Expenditure (PFCE) + Government Final Consumption Expenditure (GFCE) + Net Exports (Exports - Imports) + Change in Stock

Given:

(i) Gross Fixed Capital Formation (GFCF) = ₹130 crores

(ii) Private Final Consumption Expenditure (PFCE) = ₹510 crores

(iii) Government Final Consumption Expenditure (GFCE) = ₹70 crores

(v) Exports = ₹50 crores

(vi) Imports = ₹60 crores

(xiii) Change in Stock = ₹30 crores

NDP at FC = 130 + 510 + 70 + (50 - 60) + 30

NDP at FC = 130 + 510 + 70 - 10 + 30

NDP at FC = ₹730 crores

To calculate the Gross Domestic Product at Market Prices (GDP at MP) using the income method, we sum up all the incomes earned by factors of production in the production process.

GDP at MP = Compensation of Employees + Mixed Income of the Self Employed + Rent, Interest, and Profit + Indirect Taxes - Subsidies + Net Factor Income from Rest of the World (NFIA)

Given:

(vii) Compensation of Employees = ₹240 crores

(iii) Mixed Income of the Self Employed = ₹280 crores

(xii) Rent, Interest, and Profit = ₹90 crores

(x) Indirect Tax = ₹90 crores

(xi) Subsidies = ₹10 crores

(iv) Net Factor Income from Rest of the World (NFIA) = -₹5 crores

GDP at MP = 240 + 280 + 90 + 90 - 10 - 5

GDP at MP = ₹695 crores

So, the NDP at FC is ₹730 crores and the GDP at MP is ₹695 crores.

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