50 Important Numerical of Income Method (National Income) with solutions class 12 CBSE Board

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I have made collection of all very very important practical numerical of Income method to calculate domestic and National income. All pervious year board questions of income method are also included in this collection.

Must do Numerical of Income method of National Income with solutions class 12 CBSE Board

If you want to have a full proof command over the Income Method. You must solve the following Numerical.

Formula of Income Method to calculate National Income

Before we start to solve, first have a look the formula of income method.

Second Chart:-

For better understanding of Income Method formula read my below lecture

Detail analysis of Income Method to calculate National income, formula, definition, examples

Lets solve some important numericals.

1 Calculate a) Operating Surplus, and b) Domestic Income;

Items	₹ in Crore
i) Compensation of Employees	2,000
ii) Rent and interest	800
iii) Indirect Taxes	120
iv) Corporation tax	460
v) Consumption of fixed capital	100
vi) Subsidies	20
vii) Dividend	940
viii) Undistributed Profits	300
ix) Net Factor Income to abraod	150
c) Mixed Income	200

[CBSE – 2018]

Solution:-

Profit = Dividend + Corporation tax + Undistributed Profits

Profit = vii + iv + viii = ₹940 + ₹460 + ₹300 = ₹1700

Operating Surplus = Rent (Royalty) + Interest + Profit

a) Operating Surplus = ₹800 + ₹1700 = ₹2500

b) Domestic Income = NDP at FC = Compensation of Employees + Mixed Income + Operating Surplus

Domestic Income = ₹2000 + ₹200 + ₹2500 = ₹4700

2. Calculate National Income

Items	(₹ in crore)
i) Compensation of employees	2,000
ii) Profit	800
iii) Rent	300
iv) Interest	250
v) Mixed income of self employed	7000
vi) Net current transfers to abroad	200
vii) Net Exports	– 100
viii) Net indirect taxes	1,500
ix) Net Factor income to abroad	60
x) Consumption of fixed capital	120

[CBSE Foreign – 2017]

Solution:-

NDP at FC = Compensation of Employees + Mixed Income + Rent (Royalty) + Interest + Profit

NDP at FC = ₹2000 + ₹7000 + ₹300 + ₹250 + ₹800 = ₹10350

NNP at FC = NDP at FC + NFIA (factor income from abraod – factor income to abroad)

NNP at FC = 10350 + (0 – 60) = 10350 – 60 = ₹10290

3. Calculate Net National Product at Market Price:

Items	(₹ in thousand crore)
1. Compensation of Employees	250
2. Mixed income of self employed	600
3. Profit	80
4. Rent	30
5. Interest	40
6. Net factor income to abroad	– 10
7. Net exports	15
8. Consumption of fixed Capital	20
9. Net indirect taxes	10
10. Net current transfers to abroad	8

Solution:-

Domestic Income (NDP at FC) = Compensation of Employees + Mixed Income + Rent(royalty) + Interest + Profit

NDP at FC = 250 + 600 + 30 + 40 + 80 = ₹1000

National Income (NNP at FC) = NDP at FC + NFIA (factor income from abroad – factor income to abroad)

NNP at FC = ₹1000 + [ – (-10)] = 1000 + 10 = ₹1010

NNP at MP = NNP at FC + Net Indirect taxes (Indirect taxes – Subsidy)

NNP at MP = 1010 + 10 = ₹1020

4. Calculate National Income:

Items	(₹ in crore)
1. Profit	1,000
2. Mixed Income of self employed	15,000
3. Dividends	200
4. Interest	400
5. Compensation of employees	7,000
6. Net factor income to abroad	100
7. consumption of fixed capital	400
8. Net exports	– 200
9. Net Indirect taxes	800
10. Net Current transfers to rest of the world	40
11. Rent	500

[CBSE Foreign – 2017]

Solution:-

Domestic Income = Compensations of Employees + Mixed Income + Rent (royalty) + Interest + Profit

Domestic Income = 7,000 + 15,000 + 500 + 400 + 1,000 = ₹23900

NNP at FC = Domestic Income + NFIA

NNP at FC = 23900 – 100 = ₹23800

Further Resources:-

Read Here:- 50+ Important Numerical of Value Added Method (Must Do)

Read Here:- 50+ Important Numerical of Expenditure Method (Must Do)

5. Calculate the Gross National Product at Market Price:

Items	(₹ in crore)
1. Compensation of employees	2500
2. Profit	700
3. Mixed income of self employed	7500
4. Government final consumption expenditure	3000
5. Rent	400
6. Interest	350
7. Net factor income from abroad	50
8. Net current transfers to abroad	100
9. Net indirect taxes	150
10. Depreciation	70
11. Net exports	40

Solution:-

Domestic Income = Compensations of Employees + Mixed Income + Rent (royalty) + Interest + Profit

Domestic Income = 2500 + 7500 + 400 + 350 + 700 = ₹11450

NNP at FC = Domestic Income + NFIA

NNP at FC = 11450 + 50 = ₹11500

GNP at MP = NNP at FC + consumption of fixed capital + Net Indirect taxes

GNP at MP = 11500 + 70 + 150 = ₹11720 crore

6. Calculate the Net National Product at Market Price

Items	(₹ in Crore)
1. Mixed income of self Employed	8000
2. Depreciation	200
3. Profit	1000
4. Rent	600
5. Interest	700
6. Compensation of employees	3000
7. Net indirect taxes	500
8. Net factor income to abroad	60
9. Net exports	(-) 50
10. Net current transfers to abroad	20

Domestic Income (NDP at FC) = Compensations of Employees + Mixed Income + Rent (royalty) + Interest + Profit

Domestic Income = 3000 + 8000 + 600 + 700 + 1000 = ₹13300

NNP at FC = Domestic Income + NFIA

NNP at FC = 13300 – 60 = ₹13240

NNP at MP = NNP at FC + Net Indirect Taxes

NNP at MP = 13240 + 500 = ₹13740 crore

7. Calculate National Income:-

1. Compensation of employees	2000
2. Rent	400
3. Profit	900
4. Dividend	100
5. Interest	500
6. Mixed income of self employed	7000
7. Net factor income to abroad	50
8. Net exports	60
9. Net indirect taxes	300
10. Depreciation	150
11. Net current transfers to abroad	30

[CBSE (AI) 2017]

Solution:-

National Income = NNP at FC

Domestic Income (NDP at FC) = Compensation of Employees + Mixed Income of self employed + Rent + Interest + Profit

NDP at FC = 2000 + 7000 + 400 + 500 + 900

NDP at FC = ₹ 10800

NNP at FC = NDP at FC – Net factor income to abroad

NNP at FC = 10800 – 50

NNP at FC = ₹10750

8. Find Net National Product at Market Price:

Items	(₹ in crore)
1. Personal taxes	200
2. Wage and Salaries	1200
3. Undistributed Profit	50
4. Rent	300
5. Corporation tax	200
6. Private Income	2000
7. Interest	400
8. Net Indirect tax	300
9. Net factor income to abroad	20
10. Profit	500
11. Social Security contributions by employers	250

[CBSE Delhi 2016]

Solution:-

Compensation of Employees = Wages and salaries + Social Security contributions by employers

Compensation of Employees = 1200 + 250 = 1450

NDP at FC = Compensation of Employees + Mixed Income + Rent + Interest + Profit

NDP at FC = 1450 + 0 + 300 + 400 + 500

NDP at FC = ₹ 2650

NNP at MP = NDP at FC – Net Factor income to abroad + Net Indirect tax

NNP at MP = 2650 – 20 + 300

NNP at MP = ₹2930 crore

9. Find Net Domestic Product at Factor cost:

Items	(₹ in crore)
1. Rent	200
2. Net Current transfers to abroad	10
3. National debt interest	60
4. Corporate tax	100
5. Compensation of employees	900
6. Current transfers to government	150
7. Interest	400
8. Undistributed Profits	50
9. Dividend	250
10. Net Factor income to abroad	– 10
11. Income accruing to government	120

[CBSE DELHI 2016]

Solution

NDP at FC = Compensation of Employees + Mixed Income + Rent + Interest + Profit (Corporate tax + Dividend + Undistributed profits)

NDP at FC = 900 + 0 + 200 + 400 + (100 + 250 + 50)

NDP at FC = ₹ 1900 crore

10. Find National Income:-

Items	(₹ in crore)
1. Wages and Salaries	1000
2. Net Current transfers to abroad	20
3. Net Factor income paid to abroad	10
4. Profit	400
5. National debt interest	120
6. Social security contributions by employers	100
7. Current transfers from government	60
8. National income accruing to government	150
9. Rent	200
10. Interest	300
11. Royalty	50

[CBSE DELHI 2016]

Solution:-

Compensation of Employee = Wages and Salaries + Social Security Contributions by employers

COE = 1000 + 100 = 1100

NDP at FC = COE + Mixed Income + Rent + Royalty + Interest + Profit

NDP at FC = 1100 + 0 + 200 + 50 + 300 + 400

NDP at FC = 2050

National Income (NNP at FC) = NDP at FC – Net Factor income paid to abroad

National Income = 2050 – 10

National Income = ₹ 2040

Read Here:- 50 Important Numerical of Expenditure Method of National Income Class 12

Read Here:- 50 Important Numerical of Value Added Method of National Income Class 12

11. Calculate Net National Product at Market Price:-

Items	(₹ in crore)
1. Net Factor Income to abroad	– 10
2. Net current transfers to abroad	5
3. Consumption of fixed capital	40
4. Compensation of employees	700
5. Corporate tax	30
6. Undistributed Profits	10
7. Interest	90
8. Rent	100
9. Dividends	20
10. Net Indirect tax	110
11. Social security contributions by employees	11

[CBSE (F) 2015]

Solution:-

NDP at FC = Compensation of employees + Mixed Income + Rent + Interest + Profit ( Corporate tax + Dividend + Undistributed profits)

NDP at FC = 700 + 0 + 100 + 90 + (30 + 20 + 10)

NDP at FC = 950

NNP at MP = NDP at FC – net factor income to abroad + Net Indirect tax

NNP at MP = 950 – (- 10 ) + 110

NNP at MP = ₹ 1070

12. Calculate the Gross National Product at Market Price:

Items	(₹ in crore)
1. Wages and Salaries	800
2. Personal tax	150
3. Operating Surplus	200
4. Undistributed Profits	10
5. Social Security contributions by employers	100
6. Corporate tax	50
7. Net factor income to abroad	– 20
8. Personal disposable income	1200
9. Net indirect tax	70
10. Consumption of fixed capital	30
11. Mixed income of self employed	500
12. Royalty	9

[CBSE F 2015]

Solution

Compensation of Employees = Wages and Salaries + Social Security Contributions by Employers

COE = 800 + 100 = 900

NDP at FC = Compensation of Employees + Mixed Income + Operating Surplus

NDP at FC = 900 + 500 + 200

NDP at FC = ₹ 1600

GNP at MP = NDP at FC + Consumption of fixed capital – Net Factor income to abroad + Net indirect tax

GNP at MP = 1600 + 30 – (- 20) + 70

GNP at MP = ₹ 1720

13. Calculate National Income

Items	(₹ in crore)
1. Rent	200
2. Net Factor income to abroad	10
3. National debt interest	15
4. Wages and Salaries	700
5. Current transfers from government	10
6. Undistributed profits	20
7. Corporation tax	30
8. Interest	150
9. Social Security Contributions by employers	100
10. Net domestic product accruing to government	250
11. Net Current transfers to rest of the world	5
12. Dividend	50

[CBSE AI 2015]

Solution

Compensation of Employees (COE) = Wages and Salaries + Social Security Contributions of employers

COE = 700 + 100 = 800

Profit = Corporate tax + Dividend + Undistributed Profits

Profit = 30 + 50 + 20 = 100

NDP at FC = COE + Mixed Income + Rent + Interest + Profit

NDP at FC = 800 + 0 + 200 + 150 + 100

NDP at FC = 1250

NNP at FC = NDP at FC – Net Factor Income to abroad

NNP at FC = 1250 – 10

NNP at FC = ₹ 1240 crore

14. Calculate ‘Gross National Product at Market Price.

Items	(₹ in crore)
1. Rent	100
2. Net Current transfers to rest of the world	30
3. Social Security contributions by employers	47
4. Mixed Income	600
5. Gross Domestic Capital Formation	140
6. Royalty	20
7. Interest	110
8. Compensation of Employees	500
9. Net Domestic Capital Formation	120
10. Net Factor income from abroad	– 10
11. Net Indirect tax	150
12. profit	200

[CBSE DELHI 2015]

Solution

NDP at FC = Compensation of Employees + Mixed Income + Rent + Royalty + Interest + Profit

NDP at FC = 500 + 600 + 100 + 20 + 110 + 200

NDP at FC = 1530

GNP at MP = NDP at FC + Depreciation (Gross Domestic Capital Formation – Net Domestic Capital Formation) + Net Factor income from abroad + Net Indirect tax

GNP at MP = 1530 + (140 – 120) + ( – 10 ) + 150

GNP at MP = ₹ 1690 crore

15. Calculate Net Domestic Product at Market Price from the following.

Items	(₹ in crore)
1. Income from domestic product accruing to government	120
2. Wages and Salaries	400
3. National Debt Interest	60
4. Profit	200
5. Net Factor income to abroad	– 20
6. Rent	100
7. Current transfers from government	30
8. Interest	150
9. Social Security contribution by employers	50
10. Net indirect tax	70
11. Net current transfers to abroad	– 10

[CBSE F 2014]

Solution

NDP at FC = COE (Wages & Salaries + Social Security contribution of employers) + Mixed Income + Rent + Interest + Profit

NDP at FC = ( 400 + 50 ) + 0 + 100 + 150 + 200

NDP at FC = 900

NDP at MP = NDP at FC + Net Indirect tax

NDP at MP = 900 + 70

NDP at MP = ₹ 970 crore

16. Calculate ‘Gross National Product at Market Price’ from the following.

Items	(₹ in crore)
1. Net factor income to abroad	– 10
2. Net current transfers to abroad	20
3. Wages and Salaries	400
4. Corporation tax	50
5. Profit after corporation tax	150
6. Social Security contributions by employers	50
7. Rent	100
8. Interset	70
9. Mixed income of self employed	300
10. Net Indirect tax	140
11. Consumption of fixed capital	80

[CBSE F 2014]

Solution:-

NDP at FC = COE (Wages & Salaries + Social Security contribution of employers) + Mixed Income + Rent + Interest + Profit (Corporation tax + profit after corporation tax)

NDP at FC = (400 + 50) + 300 + 100 + 70 + (50 + 150)

NDP at FC = 1120

GNP at MP = NDP at FC + Consumption of fixed capital – Net factor income to abroad + Net Indirect tax

GNP at MP = 1120 + 80 – (- 10) + 140

GNP at MP = ₹ 1350 crore

Read Here:- List of lectures of National Income and Related Aggregates chapter

17. Calculate ‘Net National Product at Factor Cost from the following:-

Items	(₹ in crore)
1. Social Security contributions by employees	90
2. Wages and Salaries	800
3. Net Current transfers to abraod	– 30
4. Rent and Royalty	300
5. net factor income to abraod	50
6. Social security contributions by employers	100
7. Profit	500
8. Interest	400
9. Consumption of fixed capital	200
10. Net indirect tax	250

[CBSE AI 2014]

Solution:-

NDP at FC = COE (Wages & Salaries + Social Security contribution of employers) + Mixed Income + Rent and Royalty + Interest + Profit

NDP at FC = 800 + 100 + 0 + 300 + 400 + 500

NDP at FC = 2100

NNP at FC = NDP at FC – Net factor income to abraod

NNP at FC = 2100 – 50

NNP at FC = ₹ 2050 crore

18. Calculate ‘Net National Product at Factor Cost from the following:-

Items	(₹ in crore)
1. National debt interest	60
2. Wages and salaries	600
3. Net current transfers to abroad	20
4. Rent	200
5. Transfer payments by government	70
6. Interest	300
7. Net domestic product at factor cost accruing to government	400
8. Social security contributions by employers	100
9. Net factor income paid to abroad	50
10. Profits	300

[CBSE DELHI 2014]

Solutions:-

NDP at FC = COE (Wages & Salaries + Social Security contribution of employers) + Mixed Income + Rent + Interest + Profit

NDP at FC = (600 + 100) + 0 + 200 + 300 + 300

NDP at FC = 1500

NNP at FC = NDP at FC – Net factor income paid to abroad

NNP at FC = 1500 – 50

NNP at FC = ₹ 1450 crore

19. From the following data, calculate National Income:-

Items	(₹ in crore)
1. Profit	1500
2. Rent	1300
3. Net Indirect taxes	350
4. Mixed income of self employed	600
5. Compensation of employees	3000
6. Reimbursement to the employees for medical expenses	300
7. Depreciation	200
8. Excess of factor income to rest of the world over factor income from rest of the world	50
9. Excess of imports over exports	40
10. Interest	1100

Solution:-

NDP at FC = Compensation of Employees + Mixed Income + Rent + Interest + Profit

NDP at FC = 3000 + 600 + 1300 + 1100 + 1500

NDP at FC = 7500

NNP at FC = NDP at FC + NFIA

NNP at FC = 7500 + ( – 50)

NNP at FC = ₹ 7450 crore

20. Calculate Operating Surplus from the following data:-

Items	(₹ in crore)
1. Compensation of employees	300
2. Indirect taxes	200
3. Consumption of fixed Capital	100
4. Subsidies	50
5. Gross Domestic Product at market price	600

Solution:-

NDP at FC = GDP at MP – consumption of fixed capital – (indirect taxes – subsidies)

NDP at FC = 600 – 100 – (200 – 50)

NDP at FC = 350

NDP at FC = Compensation of employees + Mixed Income + Operating Suplus

350 = 300 + 0 + Operating Surplus

Operating surplus = ₹ 50 crore

21. The following information is available for an economy, On the basis of this information using income method, calculate: a) Domestic Income, and b) National Income

Items	(₹ in crore)
1. Wages	10,000
2. Rent	5,000
3. Interest	400
4. Dividend	3,000
5. Mixed Income	400
6. Undistributed profit	200
7. Social Security Contribution	400
8. Corporate profit tax	400
9. Net factor income from abroad	1000

Solution:-

Domestic Income (NDP at FC) = Wages + Social Security Contribution + Mixed Income + Rent + Interest + Corporate Profit tax + Dividend + Undistributed profit

Domestic Income = 10000 + 400 + 400 + 5000 + 400 + 400 + 3000 + 200

Domestic Income = ₹ 19800 crore

National Income = NDP at FC + net factor income from abroad

National Income (NNP at FC) = 19800 + 1000

National Income = ₹ 20800 crore

22. Given the following data and using income method calculate:-

a) Net Domestic Income
b) Gross Domestic Income
c) Net National Income
d) Net National Product at Market Price

Items	(₹ in crore)
1. Indirect taxes	9000
2. Subsidies	1800
3. Depreciation	1700
4. Mixed Income of self employed	28000
5. Operating surplus	10000
6. Net factor income from abroad	– 300
7. Compensation of employees	24000

Solution:-

Net Domestic Income (NDP at FC) = Compensation of employees + Mixed income of self employed + Operating Surplus

Net Domestic Income = 24000 + 28000 + 10000

Net Domestic Income = ₹ 62000 crore

Gross Domestic Income (GDP at FC) = NDP at FC + Depreciation

Gross Domestic Income = 62000 + 1700

Gross Domestic Income = ₹ 63700 crore

Net National Income (NNP at FC) = NDP at FC + Net Factor income from abroad

Net National Income = 62000 – 300

Net National Income = ₹ 61700 crore

Net National Product at Market Price (NNP at MP) = NNP at FC + Indirect taxes – subsidies

Net National Product at Market Price = 61700 + 9000 – 1800

Net National Product at Market Price = ₹ 68900 crore

23. Calculate the national income from the following data:-

Items	(₹ in crore)
1. Mixed income of self employed	200
2. Old age pension	20
3. Dividends	100
4. Operating surplus	900
5. Wages and Salaries	500
6. Profits	400
7. Employer’s contribution to social security schemes	50
8. Net factor income from abroad	– 10
9. Consumption of fixed capital	50
10. Net indirect tax	50

Solution:-

Compensation of Employee = Wages and Salaries + Employer’s contribution to social security schemes

Compensation of Employee = 500 + 500 = 550

Net Domestic Income (NDP at FC) = Compensation of Employee + Mixed Income + Operating surplus

NDP at FC = 550 + 200 + 900

NDP at FC = ₹ 1650

National Income (NNP at FC) = NDP at FC + Net factor income from abroad

National Income = 1650 – 10

National Income = ₹ 1640 crore

24. Calculate National Income from the following data:-

Items	(₹ in crore)
1. Rent	80
2. Interest	100
3. Profits	210
4. Tax on Profits	30
5. Employee’s contribution to social security schemes	25
6. Mixed income of self employed	250
7. Net indirect tax	60
8. Employer’s contributions to social security schemes	50
9. Compensation of employees	500
10. Net factor income from abroad	– 20

Solution:-

Domestic Income (NDP at FC) = Compensation of Employees + Mixed income of self employed + Rent + Interest + Profits

NDP at FC = 500 + 250 + 80 + 100 + 210

NDP at FC = ₹ 1140

National Income (NNP at FC) = NDP at FC + Net factor income from abroad

National Income = 1140 – 20

National Income = ₹ 1120 crore

25. Calculate National Income from the following data:-

Items	(₹ in crore)
1. Compensation of employees	400
2. Profits	200
3. Rent	150
4. Interest	100
5. Dividends	120
6. Employer’s contributions to social security schemes	40
7. Mixed income of self employed	500
8. Direct tax	100
9. Net factor income from abroad	– 50

Solution:-

NDP at FC = Compensation of employees + Mixed income of self employed + Rent + Interest + Profits

NDP at FC = 400 + 500 + 150 + 100 + 200

NDP at FC = 1350

National Income (NNP at FC) = NDP at FC + Net factor income from abroad

National Income = 1350 – 50

National Income = ₹ 1300 crore

26. From the following data, calculate Gross National Product at Market prices:-

Items	(₹ in crore)
1. Undistributed profits of private corporate enterprises	200
2. Rent	400
3. Interest	200
4. Profits	600
5. Dividends	300
6. Wages and Salaries	225
7. Net exports	– 20
8. Net indirect tax	70
9. Consumption of fixed capital	30
10. Compensation of employees	250
11. Mixed income of self employed	100
12. Net factor income from abroad	– 10

Solution:-

Domestic Income (NDP at FC) = Compensation of employees + Mixed income of self employed + Rent + Interest + Profits

NDP at FC = 250 + 100 + 400 + 200 + 600

NDP at FC = ₹ 1550

Gross National Product at Market Price (GNP at MP) = NDP at FC + consumption of fixed capital + Net factor income from abroad + Net indirect tax

GNP at MP = 1550 + 30 – 10 + 70

GNP at MP = ₹ 1640 crore

27. Calculate national income from the following data:

Items	(₹ in crore)
1. Interest	50
2. Corporate tax	10
3. Net indirect tax	40
4. Rent	20
5. Dividends paid	30
6. Compensation of employees	200
7. Consumption of fixed capital	15
8. Undistributed profits	5
9. Net factor income received from abroad	– 5
10. Royalty	10

Solution:-

Profits = Corporate tax + Dividends paid + Undistributed profits

Profits = 10 + 30 + 5

Profits = 45

NDP at FC = Compensation of employees + Mixed Income + Rent + Royalty + Interest + Profits

NDP at FC = 200 + 0 + 20 + 10 + 50 + 45

NDP at FC = 325

NNP at FC = NDP at FC + Net factor income received from abroad

NNP at FC = 325 – 5

NNP at FC = ₹ 320

28. Calculate GDP at MP and GNP at FC from the following data:-

Items	(₹ in crore)
1. Operating Surplus	700
2. Profit	100
3. Wages and Salaries (cash)	1000
4. Interest	200
5. Consumption of fixed capital	50
6. Net factor income from abroad	– 10
7. Value of benefits in kind provided to employees	200
8. Goods and service tax	150
9. Subsidies	10

Solution:-

Compensation of employees = Wages and Salaries + value of benefits in kind provided to employees

Compensation of employees = 1000 + 200 = 1200

NDP at FC = Compensation of employees + Mixed Income + Operating Surplus

NDP at FC = 1200 + 0 + 700

NDP at FC = 1900

GDP at MP = NDP at FC + consumption of fixed capital + goods and service tax – subsidies

GDP at MP = 1900 + 50 + 150 – 10

GDP at MP = ₹ 2090 crore

GNP at FC = NDP at FC + consumption of fixed capital + Net factor income from abroad

GNP at FC = 1900 + 50 – 10

GNP at FC = ₹ 1940 crore

29. Calculate GNP at MP:-

Items	(₹ in crore)
1. Mixed income of the self employed	800
2. Consumption of fixed capital	50
3. Wage and salaries	700
4. Compensation of employees from abroad	20
5. Rent on land	200
6. Royalty of sub soil assets	30
7. Interest paid by production units	150
8. Interest paid by consumers	100
9. Profits	300
10. Social security contribution by employers	100
11. Property and entrepreneurial income from abroad	– 20
12. Net indirect tax	200

Solution:-

Compensation of Employees (COE):- Wages and Salaries + Employers contribution to social security schemes

COE = 700 + 100 = ₹ 800

NDP at FC = COE + Mixed Income + Rent + Royalty + Interest + Profits

NDP at FC = 800 + 800 + 200 + 30 + 150 + 300

NDP at FC = ₹ 2280

NFIA = compensation of employees from abroad + Property and entrepreneurial income from abroad

NFIA = 20 – 20 = ₹ 0

GNP at MP = NDP at FC + consumption of fixed capital + NFIA + Net indirect tax

GNP at MP = 2280 + 50 + 0 + 200

GNP at MP = ₹ 2530

Note:- Interest paid by consumers is not included in income as it does not lead to value addition.

30. Calculate GDP at MP

Items	(₹ in crore)
1. Dividend paid	20
2. Depreciation	25
3. Rent	75
4. Interest	125
5. Undistributed profits	50
6. Subsidies	10
7. Goods and services tax (GST)	40
8. Corporation tax	30
9. Mixed Income	500
10. Net factor income from abroad	– 20
11. Compensation of employees	300

Solution:-

Profits = corporation tax + Dividend Paid + Undistributed profits

Profits = 30 + 20 + 50 = ₹ 100

NDP at FC = compensation of employees + Mixed Income + Rent + Interest + Profits

NDP at FC = 300 + 500 + 75 + 125 + 100

NDP at FC = ₹ 1100

GDP at MP = NDP at FC + Depreciation + Net Indirect tax (Goods and services tax – subsidies)

GDP at MP = 1100 + 25 + (40 – 10)

GDP at MP = ₹ 1155 crore

31. Calculate Operating Surplus

Items	(₹ in crore)
1. GNP at market price	1000
2. Wages and Salaries	400
3. Consumption of fixed capital	50
4. Net factor income to abroad	– 10
5. GST	100
6. Social security contributions by employees	60
7. Subsidies	20
8. Mixed income of the self employed	200
9. Interest	40
10. Social security contribution by employers	100

Solution:-

NDP at FC = GNP at MP – consumption of fixed capital + Net factor income to abroad – Indirect tax (GST – Subsidies)

NDP at FC = 1000 – 50 – 10 – (100 – 20)

NDP at FC = ₹ 860

Compensation of employee = Wages and Salaries + Social security contribution of employers

Compensation of employee = 400 + 100

Compensation of employee = 500

NDP at FC = compensation of employees + Mixed Income + Operating Surplus

910 = 500 + 200 + Operating Surplus

Operating Surplus = 860 – 700

Operating Surplus = ₹ 160 crore

Further Reading

S.N	Topics
1.	What is Macroeconomics
2.	What are Goods in economics
3.	What are Consumption Goods
4.	What are capital goods
5.	What are intermediate Goods
6.	What is intermediate consumption
7.	What are final Goods
8.	What is Final Consumption
9.	What is investment in economics
10.	What is stock and flow
11.	What are transfer payments
12.	What is circular flow of income
13.	What is Domestic Territory of a Country
14.	What is normal resident of a country
15.	Nominal GDP and Real GDP

S.N	Topics
1.	What is GDP Deflator
2.	What are externalities in economics
3.	Limitations of GDP as a measure of welfare

S.N	Topics
1.	Items to be included in National income
2.	Items to be included in Domestic Income

S.N	Topics
1.	National Income and Related Aggregates, formula, Definition, process
2.	Value added Method, formula, Definition, process
3.	Income Method, formula, Definition, process
4.	Expenditure Method, formula, Definition, process
5.

S.N	Topics
1.	150+ Numerical of Value Added Method
2.	150+ Numerical of Income Method
3.	150+ Numerical of Expenditure Method
4.	150+ Numerical of National Income and related aggregates

S.N	Topics
1.	250+ MCQs of National Income