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Question
Distinguish between Domestic Income and National Income.
Solution
| Domestic Income | National Income | |
| 1. | Domestic income is the sum of all factor incomes generated by all producing units located within a country's domestic territory during an accounting period. | The sum total of factor incomes earned by normal residents of a country during an accounting year is referred to as national income. |
| 2. | It is a territorial concept. | It is a national concept. |
| 3. | Domestic Income = National Income - NFIA | National Income = Domestic Income + NFIA |
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RELATED QUESTIONS
Calculate ‘Net Domestic Product at Factor Cost’ and ‘Gross National Disposable Income’:
| (Rs crores_ | ||
| 1 | Net current transfers to abroad | 15 |
| 2 | Private final consumption expenditure | 800 |
| 3 | Net imports | (-)20 |
| 4 | Net domestic capital formation | 100 |
| 5 | Net factor income to abroad | 10 |
| 6 | Depreciation | 50 |
| 7 | Change in stocks | 17 |
| 8 | Net indirect tax | 120 |
| 9 | Government final consumption expenditure | 200 |
| 10 | Exports | 30 |
Calculate (a) Operating Surplus, and (b) Domestic Income :
| (Rs in crores) | ||
| (i) | Compensation of employees | 2,000 |
| (ii) | Rent and interest | 800 |
| (iii) | Indirect taxes | 120 |
| (iv) | Corporation tax | 460 |
| (v) | Consumption of fixed capital | 100 |
| (vi) | Subsidies | 20 |
| (vii) | Dividend | 940 |
| (viii) | Undistributed profits | 300 |
| (ix) | Net factor income to abroad | 150 |
| (x) | Mixed income | 200 |
What is nominal gross domestic product?
From the following data calculate the value of Domestic Income:
| ITEMS | Amount (in ₹ Crores) |
| Compensation of Employees | 2,000 |
| Rent and Interest | 800 |
| Indirect Taxes | 120 |
| Corporate Tax | 460 |
| Consumption of Fixed Capital | 100 |
| Subsidies | 20 |
| Dividend | 940 |
| Undistributed Profits | 300 |
| Net Factor Income from Abroad | 150 |
| Mixed Income of self employed | 200 |
From the following data, calculate the value of compensation of employees (COE):
| S.No. | Items | Amount in (₹ crore) |
| (i) | Old age pension | 2,000 |
| (ii) | Wages and salaries in cash |
60,000 |
| (iii) | Rent free accommodation to employees |
30,000 |
| (iv) | Employer's contribution to provident fund |
7,500 |
| (v) | Payment of life insurance premium by the employees |
2,500 |
| (vi) | Contribution to provident fund by employees |
35,000 |
From the following data, calculate the value of compensation of employees (COE):
| S.No. | Items | Amount in (₹ crore) |
| (i) | Old age pension | 1,250 |
| (ii) | Wages and salaries in cash |
49,500 |
| (iii) | Rent free accommodation to employees |
13,500 |
| (iv) | Employer's contribution to provident fund |
8,900 |
| (v) | Payment of life insurance premium by the employees |
3,000 |
| (vi) | Contribution to provident fund by employees |
35,600 |
On the basis of the given data, estimate the value of Domestic Income:
| S. No. | Items | Amount (₹ in crore) |
| i. | Household Consumption Expenditure | 600 |
| ii. | Gross Fixed Capital Formation | 200 |
| iii. | Change in stock | 40 |
| iv. | Government Final Consumption Expenditure | 200 |
| v. | Net Exports | (-)40 |
| vi. | Net Indirect Taxes | 120 |
| vii. | Net Factor Income From Abroad | 20 |
| viii. | Consumption of Fixed Capital | 40 |
Giving valid reasons, explain how the following would be treated while estimating domestic income?
Payment made by American tourist for goods purchased in India.
Giving valid reasons, explain how the following would be treated while estimating domestic income?
Tomatoes grown by Ms. Puja in her kitchen garden.
