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Question
On the basis of the data given below for an imaginary economy, estimate the Net Domestic Product at Factor Cost (NDPFC):
| S.NO. | Items | Amount (₹ in crore) |
| (i) | Household Consumption Expenditure | 3,000 |
| (ii) | Government Final Consumption Expenditure | 1,000 |
| (iii) | Net Domestic Fixed Capital Formation | 1,000 |
| (iv) | Change in Stock | 200 |
| (v) | Exports | 500 |
| (vi) | Indirect Taxes | 350 |
| (vii) | Imports | 300 |
| (viii) | Subsidies | 50 |
Solution
NDPFC = GDPMP - Depreciation - Net Indirect Taxes
= 5,400 - 0 - 300 = 5100 crore
GDPMP = Final Consumption Expenditure + Gross Domestic Capital Formation + Net Exports
= 4,000 + 12,000 + 200 = 5,400 crore
- Final Consumption Expenditure = Household Consumption Expenditure + Government Final Consumption Expenditure
= 3,000 + 1,000 = 4,000 crore - Gross Domestic Capital Formation = Net Domestic Fixed Capital Formation + Depreciation + Change in Stock
= 1,000 + 0 + 200 = 1,200 crore - Net Export = Exports - Imports = 500 - 300 = 200 crore
- Net Indirect Taxes = Indirect Taxes - Subsides = 350 - 50 = 300 crore
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