Which among the following does not form the part of national income of India?
Answer & explanation
Correct answer: option 1
The correct answer is Option 1: financial help given to flood victims
Let's analyze each option:
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Financial help given to flood victims: This type of financial assistance is a transfer payment and does not represent production or income earned from productive activities. Therefore, it is not included in national income.
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Profits earned by an Indian bank from its branches abroad: Profits earned by Indian entities from their operations abroad are included in national income because they represent income earned by Indian entities, regardless of where it is earned.
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Salaries paid to resident Indians working in the Indian Embassy in America: This represents income earned by Indian citizens but working abroad. Such income is included in national income.
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Interest received by an individual from banks: Interest income earned by individuals from banks is included in national income because it represents income earned within the country's borders. This is income earned by a resident Indian from capital invested within India.