Question

Income generated from Aircrafts of Air India operating between Canada and England would be added to the domestic income (NDPFC) of ____________.

• A. Canada
• B. England
• C. Both Canada and England
• D. India

Hint:

Domestic income depends on location, while national income depends on ownership (residency).

Answer 1

The Correct Option is D

Concept: Domestic Income (NDPFC)
Domestic income refers to the income generated within the domestic territory of a country during a given period of time. It includes income earned by:

• Residents of the country
• Domestic production units operating within the country

It is important to distinguish between domestic income and national income, as the former is based on location, while the latter is based on ownership.
Step 1:Ownership principle
Air India is an Indian company, which means:

• It is owned by residents of India
• Its income is associated with Indian ownership

Step 2:Income classification
The classification of income depends on whether we are considering domestic income or national income:

• Income earned within India is part of domestic income (NDPFC)
• Income earned abroad by Indian-owned enterprises is not included in domestic income
• However, such income is included in: \[ \text{India's national income} \] because national income follows the ownership (residency) principle

Step 3:Conclusion
Thus, income earned by Air India abroad is counted in:

• National income of India (due to Indian ownership)
• Not in domestic income (since it is earned outside India's territory)

\[ \text{India} \]