If GNP at market price is ₹60,000 crore, NNP at factor cost is ₹54,000 crore and depreciation is ₹3,500 crore, what will be the net indirect taxes (NIT)?
Answer and explanation
Correct answer: ₹2,500 crore
Use the conversion formula NNPFC = GNPMP − depreciation − NIT. Substituting the given values gives 54,000 = 60,000 − 3,500 − NIT. Therefore, NIT = 60,000 − 3,500 − 54,000 = ₹2,500 crore. The depreciation figure itself is not NIT, and ₹6,000 crore is the total difference before separating depreciation from the market-price adjustment. Hence, option A is correct.
Frequently asked questions
What is the correct answer to this question?
₹2,500 crore
Why is this the correct answer?
Use the conversion formula NNPFC = GNPMP − depreciation − NIT. Substituting the given values gives 54,000 = 60,000 − 3,500 − NIT. Therefore, NIT = 60,000 − 3,500 − 54,000 = ₹2,500 crore. The depreciation figure itself is not NIT, and ₹6,000 crore is the total difference before separating depreciation from the market-price adjustment. Hence, option A is correct.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
