Classification: Internal
NNPfc to GDPmp
Net national product factor cost
Gross domestic product market price
NNPfc=GDPmp+NFIA-dep-Net ind
NNPfc-NFIA+DEP+net indirect=GDPmp
NNPmp- GNPfc
Step-1 net to gross: + depreciation
NNPmp + Dep = GNPmp
Step 2 mp to fc: - NIT
GNPmp - NIT = GNP fc
GDP 1000
NIT 50
NFIFA 100
Dep 20
Calculate National Income (NNPfc):
NNPfc = GDPmp -dep-NIT+NFIFA
Classification: Internal
= 1000-20 -50+100
= 1030
GDP 1000
Indirect tax 50
Factor income from 100
abroad
Dep 20
subsidies 100
Factor income to 200
abroad
03 .03. 26
Value Addition Method:
(i)Value of output = Sales (if entire stock is
sold)
(ii) Value of output = Sales + Change in
Stock (if some stocks are unsold)
Value Addition= Sales + Δ Stock – Int.
Consumption
Δ Stock = Closing stock – Opening Stock
Classification: Internal
Sum total of value addition in an economy
by all the enterprises during a year is known
as Gross Value Added at market price
(GDPmp): ------ national Income(NNPfc)
S
N Items ₹ (in
o
cr)
1 Sales by firm A 100
2 Purchase from firm B by firm A 40
3 Purcahse from firm A by firm B 60
4 Sales by firm B 200
5 C/S of firm A 20
6 C/s of firm B 35
7 O/s of firm A 25
8 O/s of firm B 45
9 Indirect taxes paid by both the firms 30
Calculate value added by firm A= (1-2+{5-7})
100-40+(-5) = 55 cr.
Calculate value added by firm B=
{4-3+(6-8)}= 200 – 60 -10 = 130 cr
Gross value added by both the firms. (GDPfc)
GVA by A + GV by B – Indirect tax
55+130-30 = 155 crores
Classification: Internal
04 March 2026:
From the following:
(i) Calculate Value Added at Market price
(ii) National income
S. No Items ₹ in lakhs
(i) Value of output
(a) primary sector 800
(b) secondary sector 200
(c) tertiary sector 300
(ii) Value of intermediate purchases
(a) primary sector 400
(b) secondary sector 100
(c) tertiary sector 50
(iii) Indirect taxes paid by all sectors 50
(iv) Consumption of fixed capital by all sectors 80
(v) Factor income received by the residents 10
from ROW
(vi) Factor income paid to non-residents 20
(vii) Subsidies received by all sectors 20
GVA Mp = 750
NNPfc =
GDPmp – (iii) + (vii)- (iv)+ (v) – (vi)
Classification: Internal
05 March 2026:
Income Method of calculating National
Income
Sum total of all factor incomes generated within a year in a
country/economy is known as Domestic Income (NDPfc).
Factor Incomes:
1. Compensation of Employees:
(i) Salary and wages
(ii) Payment in Kind
(iii) Pensions on retirement
(iv) Employers contribution to Social Security
Scheme (Gratuity etc/ EPF)
2. Operating Surplus:
(i) Rent
(ii) Interest
(iii) Profit:-
(a) Corporate Tax
(b) Corporate Savings
(c) Dividends
3. Mixed Income of Self Employed
= 1 + 2 + 3 = NDPfc (Domestic Income)
Classification: Internal
NNPfc = National Income = NDPFc + NFIFA
Find Out (i) National Income and (ii) GDP mp
S. No Items ₹ in lakhs
(i) Compensation of employees 1,000
(ii) Wages and Salaries 600
(iii) Operating surplus 800
(iv) Mixed income of self employed 1600
(v) Factor Income to Abroad 300
(vi) Consumption of fixed capital 100
(vii) Indirect tax 30
8 March 2026
Expenditure Method: Sum total of Final expenditure in an
economy during a year is know as GDPMP
Final Expenditures:
1. Private final consumption expenditure by HH – (C)
2. Government final consumption exp. (G)
3. Investment Expenditure by producers- (I)
4. Net Exports (X-M)
1+2+3+4 = GDPMP
From GDPmp convert it into National Income
GDPmp – Dep = NDPmp
NDPmp – NIT = NDPfc
NDPfc + NFIFA = NNPfc (National Income)
Classification: Internal
1. Investment Expenditure: is also known as
Gross Domestic Capital Formation
2. GDCF = Gross Domestic Fixed Capital Formation +
Change in Stock.(C/s-Os)
Example of Investment expenditure:
(i) Investment exp by HH- (Construction of house)
(ii) Investment exp by govt- (Roads, Bridges etc)
(iii) Investment exp by firms- (Machines, tractors etc.)
Calculate GDPmp and National Income:
S. No Items ₹ in lakhs
(i) Private final cons. Exp 1,000
(ii) Govt. final cons. Exp 600
(iii) Exports 800
(iv) NFIFA 160
(v) Imports 300
(vi) Consumption of fixed capital 100
(vii) NIT 30
(viii) Gross domestic fixed capital formation 1200
(ix) Change in stock 100
GDPmp = (i) + (ii) + (viii +ix) + (iii-v)
= 1000+600+1200+100+800-300
Classification: Internal
= ₹3400 lakhs
NNP fc = GDPmp – (vi) – (vii) +(iv)
= 3400 – 100 – 30 + 160
= ₹3430 lakhs
S. No Items ₹ in lakhs
(i) Private final cons. Exp 1,000
(ii) Govt. final cons. Exp 600
(iii) Exports 800
(iv) Factor income to abroad 160
(v) Imports 300
(vi) Consumption of fixed capital 100
(vii) Indirect taxes 30
(viii) Purchase of machinery by firms 1200
(ix) Change in stock 100
(x) Factor income from abroad 100
(xi) subsidies 10
(xii) fixed investment by households 400
(xiii) Government fixed investment 500
GDPmp = (i) + (ii) + (iii-v) + (viii+xii+xii) + (ix)
= 1000 + 600 + 500 + 2100 + 100 = 4300 lakhs
NNPfc = GDPmp – (vi) – vii + xi + (x-iv)
= 4300 – 100 -30 +10 + (100-160)
= 4120 lakhs
Classification: Internal
11 March 2026
Calculate National Income:
S. No Items ₹ in lakhs
(i) Private final cons. Exp 800
(ii) Govt. final cons. Exp 1000
(iii) Exports 450
(iv) Factor income to abroad 200
(v) Imports 700
(vi) Indirect taxes 100
(vii) Net domestic fixed capital formation 700
(viii) Opening Stock 80
(ix) Factor income from abroad 100
(x) Subsidies 50
(xi) Closing Stock 120
Attention:
If Net Domestic Capital Formation is given, then directly you will get
NDPmp
NDPmp= (i) + (ii) + (vii) + (xi-viii) + (iii – v)
= 800 + 1000 + 700 + (120-80) + (450-700)
= 2290 lakhs
NNPfc = NDPmp – NIT + NFIFA
= NDPmp – (vi-x) + (ix-vi)
= 2140 lakhs
Classification: Internal
Calculate National Income by (i) Income method (ii) Expenditure method
S. No Items ₹ in crores
(i) Private final cons. Exp 800
(ii) Mixed Income 900
(iii) Govt. final cons. Exp 1000
(iv) Exports 450
(v) Profits 100
(vi) Factor income to abroad 200
(vii) Imports 700
(viii) Interest 50
(ix) Indirect taxes 100
(x) Net domestic fixed capital formation 700
(xi) Opening Stock 80
(xii) Factor income from abroad 100
(xiii) Rent and Royalties 100
(xiv) Subsidies 50
(xv) Wages and Salaries 400
(xvi) Closing Stock 120
(xvii) Employees contribution to Social Security 100
Income Method: Expenditure Method:
NDPfc: (ii) + (v) + (viii) + (xiii) + (xv) NDPmp = (i) + (iii) + (iv-vii) + (x)+
900 + 100 + 50 +100 + 400 (xvi-xi)
= 1550 = 2290
NNPfc = NDPfc + NFIFA NNPfc= NDPmp – NIT + NFIFA
= 1550 -100 = 2290 – (ix-xiv) + (xii-vi)
= 1450 = 2140
Classification: Internal
12 March 2026
Given the following data, estimate the value of Net Value Added at factor
cost:
S. No Items ₹ (in Crore)
(i) Sales 1,000
(ii) Change in stocks 150
(iii) Purchase of raw materials 300
(iv) Gross Investments 100
(v) Net Investments 80
(vi) Net Indirect Taxes 20
GVA mp =Sales + Change in Stock – Int. Consumption
= 1000 + 150 – 300 = 850
NVAfc = GVAmp – dep – NIT
= 850 – (iv-v) – (vi) = 850 -20 -20 = 810
[Note: depreciation – gross investment – net investment]
Example: GDPmp – dep = NDPmp
So depreciation = GDPmp – NDPmp
NIT = if indirect tax and subsidy is not given in the questions then,
Search for the similar items in MP and FC
Ex: GDPmp and GDPfc is given in the questions then
NIT = GDPmp-GDPfc
Classification: Internal
Given the following data, estimate the value of Net Value Added at factor
cost:
S. No Items ₹ (in Crore)
(i) Fixed capital goods (Life span of 5 years) 15
(ii) Domestic Sales 200
(iii) Change in Stocks (-)10
(iv) Exports 10
(v) Single use producer goods 120
(vi) Net Indirect Taxes 20
GVAmp = (ii) + (iv) + (iii) – (v)
= 200 + 10 + (-) 10- 120
= 80
NVAfc = GVAmp -NIT- Dep
=80 – (vi) – 3
= 80-20-3
= 57 crores