Question

The following data represents the income of a country for a year: 

Calculate the National Income (NI) of the country.

• A. 7500 Crores
• B. 9000 Crores
• C. 9500 Crores
• D. 10000 Crores

Hint:

National Income (NI) is calculated by adding Net Indirect Taxes to NDP at market price. Depreciation is already accounted for in NDP.

Answer 1

The Correct Option is A

To determine National Income (NI), we will utilize the provided data and the relevant formula.

1. Definitions:

- Net Domestic Product (NDP) at Market Price: The total market value of goods and services produced domestically.
- Indirect Taxes: Taxes levied on goods and services, increasing their market price.
- Subsidies: Government payments that reduce the cost of goods and services.
- Depreciation: The decrease in the value of capital assets over time.
- National Income (NI): Defined as NDP at factor cost, calculated as:
\[ \text{NI} = \text{NDP at Market Price} - \text{Indirect Taxes} + \text{Subsidies} \]

2. Provided Data:

NDP at Market Price = 8000 crores
Indirect Taxes = 1000 crores
Subsidies = 500 crores
Depreciation = 600 crores (Note: Depreciation is not directly used in this NI calculation)

3. National Income Calculation:

\[ \text{NI} = 8000 - 1000 + 500 = 7500 \text{ crores} \]

Conclusion:

The calculated National Income (NI) for the country is 7500 crores.