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Question
From the following data, calculate Personal Income and Personal Disposable Income.
|
Rs (crore) |
||
|
(a) |
Net Domestic Product at factor cost |
8,000 |
|
(b) |
Net Factor Income from abroad |
200 |
|
(c) |
Undisbursed Profit |
1,000 |
|
(d) |
Corporate Tax |
500 |
|
(e) |
Interest Received by Households |
1,500 |
|
(f) |
Interest Paid by Households |
1,200 |
|
(g) |
Transfer Income |
300 |
|
(h) |
Personal Tax |
500 |
Solution
Personal Income = NDPFC + Net factor income from abroad (NFIA) + Transfer Income − Undistributed profit − corporate tax − Net interest paid by households
NDPFC = Rs.8000 crores
NFIA = Rs.200 crores
Transfer Income = Rs.300 crores
Undistributed profit = Rs.1,000 crores
Corporate tax = Rs.500 crores
Net interest paid by households = Interest paid − Interest received
= 1200 − 1500
= (−) Rs.300 crores
So, putting the values in the above formula
PI = 8000 + 200 + 300 − 1000 − 500 − (− 300)
= 8000 + 200 + 300 − 1000 − 500 + 300
⇒ PI = 7300
So, Personal Income = Rs.7300 crores
Personal Disposable income = Personal Income − Personal Payments
= 7300 − 500
= Rs.6800 crores
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RELATED QUESTIONS
Calculate National Income and Personal Disposable Income:
| (Rs crore) | ||
| (i) | Corporate tax | 100 |
| (ii) | Private final consumption expenditure | 900 |
| (iii) | Personal Income tax | 120 |
| (iv) | Government final consumption expenditure | 200 |
| (v) | Undistributed profits | 50 |
| (vi) | Change in stocks | (-)20 |
| (vii) | Net domestic fixed capital formation | 120 |
| (viii) | Net imports | 10 |
| (ix) | Net indirect tax | 150 |
| (x) | Net factor income from abroad | (-)10 |
| (xi) | Private income | 1000 |
Find national product at market price and personal disposable income:
| (Rs crore) | ||
| (i) | Personal taxes | 200 |
| (ii) | Wages and salaries | 1200 |
| (iii) | Rent | 50 |
| (iv) | Undistributed profit | 300 |
| (v) | Corporate tax | 200 |
| (vi) | Private income | 2000 |
| (vii) | Interest | 400 |
| (viii) | Net indirect tax | 300 |
| (ix) | Net factor income to abroad | 20 |
| (x) | Profit | 500 |
| (xi) | Social security contribution by employers | 250 |
Find Gross Domestic Product at Factor Cost and Personal Disposable Income
| (Rs crore) | ||
| (i) | Personal tax | 100 |
| (ii) | Net National Disposable Income | 800 |
| (iii) | Corporation tax | 50 |
| (iv) | Net factor income of abroad | (-)10 |
| (v) | Retained income | 200 |
| (vi) | Indirect tax | 170 |
| (vii) | Privet income | 600 |
| (viii) | Subsidy | 30 |
| (ix) | Consumption of fixed capital | 60 |
| (x) | Net current transfer from abroad | 10 |
Find National Income and Personal Disposable Income:
| (Rs crore) | ||
| (i) | Undistributed profits | 70 |
| (ii) | Gross National Disposable Income | 1,000 |
| (iii) | Net current transfers to abroad | 20 |
| (iv) | Consumption of fixed capital | 100 |
| (v) | Corporation tax | 200 |
| (vi) | Indirect tax | 250 |
| (vii) | Current transfers from government | 50 |
| (viii) | Subsidies | 60 |
| (ix) | Private income | 800 |
| (x) | Personal tax | 150 |
Calculate National Income and Gross National Disposable Income from the following:
|
S. No. |
Items |
(Rs crore) |
|
(i) |
Net current transfers to the rest of the world |
(–) 5 |
|
(ii) |
Private final consumption expenditure |
500 |
|
(iii) |
Consumption of fixed capital |
20 |
|
(iv) |
Net factor income to abroad |
(–) 10 |
|
(v) |
Government final consumption expenditure |
200 |
|
(vi) |
Net indirect tax |
100 |
|
(vii) |
Net domestic fixed capital formation |
120 |
|
(viii) |
Net imports |
30 |
|
(ix) |
Change in stocks |
(–) 20 |
In a single day Raju, the barber, collects Rs 500 from haircuts; over this day, his equipment depreciates in value by Rs 50. Of the remaining Rs 450, Raju pays sales tax worth Rs 30, takes home Rs 200 and retains Rs 220 for improvement and buying of new equipment. He further pays Rs 20 as income tax from his income. Based on this information, complete Raju’s contribution to the following measures of income (a) Gross Domestic Product (b) NNP at market price (c) NNP at factor cost (d) Personal income (e) Personal disposable income.
