Read the passage carefully and answer the questions based on the passage:
Composition of GDP: Income Method
|
S.No. |
Items |
Estimates (in crores) |
|
1 |
Compensation for employees |
2000 |
|
2 |
Rent |
20 |
|
3 |
Interest |
30 |
|
4 |
Royalty |
40 |
|
5 |
Profit |
50 |
|
6 |
Mixed income for self-employed |
1000 |
|
7 |
Net factor income from abroad |
-3 |
|
8 |
Indirect taxes |
500 |
|
9 |
Subsidies |
400 |
|
10 |
Depreciation |
260 |
Calculate Net Domestic Product at factor cost (NDPFC).
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs. 3140 crore
To calculate Net Domestic Product at Factor Cost (NDPFC) using the income method, we sum up all factor incomes generated within the domestic territory of a country, and exclude consumption of fixed capital (depreciation).
NDP at FC = Compensation of Employees + Rent + Interest + Royalty + Profit + Mixed Income of Self-Employed + Net Factor Income from Abroad
= 2000 + 20 + 30 + 40 + 50 + 1000
= Rs. 3140 crore