Aggregates related to national income - NDP

Domestic product is based on production within the domestic territory, not on the nationality of the producer. Therefore, the company’s entire net value added of ₹720 crore is included in India’s NDP. Profit sent to foreign owners is a factor payment from India to abroad, so it reduces India’s net factor income from abroad by ₹150 crore. It is not deducted from domestic product itself.

Net factor income from abroad is NFIA = factor income received from abroad − factor income paid to foreigners = 610 − 760 = −₹150 crore. The relationship is NNP = NDP + NFIA. Therefore, NDP = NNP − NFIA = 8,600 − (−150) = ₹8,750 crore. Since NFIA is negative, NDP is ₹150 crore higher than NNP; simply choosing ₹8,600 ignores the foreign-income adjustment.

The governing concept is net value added: value of output minus intermediate consumption and depreciation. Imputed rent is treated as the output of owner-occupied housing. Therefore, NVA = ₹5,00,000 − ₹75,000 − ₹35,000 = ₹3,90,000. Option B subtracts depreciation only, while Option C subtracts only maintenance; Option D adds an amount instead of making both required deductions.

The governing principle is that resale of an old good is not current production, so the machine’s ₹24 lakh sale value is excluded. However, the agent’s brokerage and the repairer’s service are newly produced services in the current period. Their contribution is ₹85,000 + ₹1,15,000 = ₹2,00,000. Therefore, Option C is correct; Options A and B omit one service, while D includes the old machine.

The income method includes factor incomes generated by current production, such as compensation for current labour. The ₹9 lakh salary qualifies. Lottery winnings are a transfer or windfall receipt, not payment for production, and the rise in the price of old shares is a capital gain rather than current factor income. Thus, only ₹9 lakh is included, making Option A correct.

Real per-capita NDP equals real NDP divided by population, so growth rates must be combined as a ratio, not simply subtracted when an exact result is requested. The factor is 1.06 ÷ 1.08 = 0.98148; change = 0.98148 − 1 = −0.01852, or approximately a 1.85% fall. Thus, Option A is correct; 2% is only a rough subtraction.

Real per-capita NDP is obtained by dividing real NDP by population. Therefore, its exact growth factor is 1.10 ÷ 1.04. The percentage change is (1.10 ÷ 1.04 − 1) × 100 = 5.7692%, approximately 5.77%. Option B, 6%, comes from simple subtraction and is only a rough approximation; Options C and D ignore the population denominator.

The relationship is NDP at market price = NDP at factor cost + indirect taxes − subsidies. Since the two NDP measures are equal, net indirect taxes must be zero. Therefore, indirect taxes equal subsidies: 390 − subsidies = 0, so subsidies = 390 crore rupees. Hence, option C is correct; zero would be wrong because taxes are given as positive.

Per capita NDP equals total real NDP divided by population. Let the second population be P; the first is 1.75P. Since total real NDP is equal, the first per capita value is 1/1.75 = 0.5714 times the second. Therefore, its shortfall is 1 − 0.5714 = 0.4286, or approximately 42.86%. Option B gives the remaining level, not the percentage reduction.

Real per capita NDP is calculated as real NDP divided by population. Real NDP increases by (13,860 − 12,600)/12,600 × 100 = 10%. Population also increases by (154 − 140)/140 × 100 = 10%. Thus the numerator and denominator rise in the same proportion, so their ratio remains unchanged. Hence option B is correct; a 10% rise in both does not create a per-capita increase.

Use net indirect taxes = indirect taxes − subsidies = 1,040 − 420 = ₹620 crore. Convert NDP at market price to NDP at factor cost: 11,400 − 620 = ₹10,780 crore. Add net factor income from abroad to obtain NNP at factor cost: 10,780 + 310 = ₹11,090 crore. Finally add depreciation to convert net national product into gross national product: 11,090 + 590 = ₹11,680 crore, so C is correct.

First convert GNP at market price to NNP at market price by subtracting depreciation: 15,200 − 900 = ₹14,300 crore. Net factor income from abroad is 520 − 740 = −₹220 crore, so NDP at market price is NNPMP − NFIA = 14,300 − (−220) = ₹14,520 crore. Net indirect taxes equal 840 − 310 = ₹530 crore. Therefore NDP at factor cost = 14,520 − 530 = ₹13,990 crore, option B.

Real NDP per capita equals real NDP divided by population. With a 12% output increase and an 8% population increase, the exact growth factor is 1.12 ÷ 1.08 = 1.037037. Hence per-capita real NDP rises by about 3.70%, making option A correct. Subtracting 8 from 12 gives only a rough approximation of 4%.

National income is NNP at factor cost, while NDP at factor cost is a domestic measure. The relationship is National Income = NDP at factor cost + net factor income from abroad. Consequently, the two aggregates are equal when NFIA is zero. Option C is correct; depreciation and indirect taxes concern other conversions, and imports alone do not determine this equality.

Conventional NDP is obtained by subtracting consumption of produced fixed capital, such as machinery and buildings, from GDP. It generally does not make a complete deduction for the loss of forests, minerals, groundwater, or other natural assets. Consequently, it can overstate sustainable output. Environmental accounting or green-NDP adjustments are needed to reflect resource depletion more fully.

NDP per capita is an average measure of net marketed output; it is not a complete measure of welfare. Welfare can decline if higher production causes pollution, if income becomes more unequal, or if unpaid household and community services deteriorate. Thus, a rise in the average does not guarantee better quality of life. Production is not always harmful, and the other alternatives are unsupported generalisations.

National income is NDP at factor cost. To return from national to domestic, subtract NFIA: NDP at factor cost = ₹20,000 − (−₹500) = ₹20,500 crore. To convert factor cost to market price, add net indirect taxes: ₹20,500 + ₹1,000 = ₹21,500 crore. Therefore, option D is correct. The negative NFIA must be handled carefully; subtracting a negative amount increases the domestic figure.

National income is NNP at factor cost. To obtain NDP at factor cost, subtract NFIA because national = domestic + NFIA: ₹22,500 − ₹600 = ₹21,900 crore. Then convert factor cost to market price by adding net indirect taxes: ₹21,900 + ₹1,100 = ₹23,000 crore. Hence option C is correct; the order keeps the domestic and valuation adjustments distinct.

For comparable NDP measures, net indirect taxes = NDP at market price − NDP at factor cost. Substitution gives ₹17,200 − ₹17,650 = −₹450 crore. Therefore option B is correct. The negative result means subsidies exceed indirect taxes by ₹450 crore. A positive ₹450 crore would result from reversing the subtraction, while zero would incorrectly assume the two measures are equal.

National income is NNP at factor cost. To obtain NDP at factor cost, subtract NFIA from national income: ₹25,800 − (−₹700) = ₹26,500 crore. A negative NFIA is therefore added in numerical effect. Next convert factor cost to market price by adding net indirect taxes: ₹26,500 + ₹1,250 = ₹27,750 crore. Hence option D is correct.