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Calculate Net Domestic Product at Factor Cost by (a) Income Method, an (b) Production Method from the following data :

(Items) (Rs.in crore)
i Net value Added at market price by primary sector  1,000
ii Wages and salaries 2,000
iii Social Security Contribution by Employers 100
iv Net value added at market price by the secondary sector 600
v Corporation Tax 30
vi Retained Earnings of Private Corporations 10
vii Net value added at market price by the tertiary sector 1,400
viii Dividend 60
ix Rent 300
x Interest 300
xi Net Indirect Tax 200
xii Social Security Contribution by Employees 80
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2 Answers

(a) By Income Method

Net Domestic Product at Factor Cost (NDPFC) = Wages and Salaries + Social Security Contribution by Employers + Corporation Tax + Retained Earning of Private Corporations + Dividend + Rent + Interest

=2,000+ 100+30+ 10 + 60+300+ 300 

= Rs. 2,800 crore. 

(b) By Production Method

Net Domestic Product at Factor Cost (NDPFC) = Net Value Added by Primary Sector + Net Value Added by Secondary Sector + Net Value Added by Tertiary Sector - Net indirect Taxes 

= 1,000 + 600 + 1,400 - 200

= (3,000 - 200) 

= Rs. 2,800 crore

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(a) By Income Method

Net Domestic Product at Factor Cost (NDPFC) = Wages and Salaries + Social Security Contribution by Employers + Corporation Tax + Retained Earning of Private Corporations + Dividend +Rent + Interest 

= 2,000+ 100 + 30 + 10 + 60 + 300 + 300 

= Rs. 2,800 crore.

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