From the following data calculate net domestic product at factor cost.
| S.No. | Item | ₹ crore |
| (i) | Depreciation | 20 |
| (ii) | Gross National Product at factor cost | 1000 |
| (iii) | Net factor income from abroad | 30 |
| (iv) | Net indirect taxes | 10 |
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → ₹ 950 crores
Given:
Gross National Product at factor cost (GNPFC) = ₹ 1000 crore
Net factor income from abroad (NFIA) = ₹ 30 crore
Depreciation = ₹ 20 crore
Net domestic product at factor cost (NDPFC) is reached in two steps: take out depreciation (gross to net), then NFIA (national to domestic).
NNPFC = GNPFC − Depreciation
NNPFC = 1000 − 20 = ₹ 980 crore
NDPFC = NNPFC − NFIA
NDPFC = 980 − 30 = ₹ 950 crore
Net indirect taxes (₹ 10 crore) are not used. Both GNP and NDP here are at factor cost, so there is no change from market price to factor cost.
NCERT (2026-27): Introductory Macroeconomics — Chapter 2: National Income Accounting
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