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 solve the problem, we need to calculate the National Income (NI) using the given data and the appropriate formula.

1. Understanding the Concepts:

- Net Domestic Product (NDP) at Market Price: Total value of goods and services produced within the country.
- Indirect Taxes: Taxes added to the market price.
- Subsidies: Amounts paid by the government to reduce the cost of goods.
- Depreciation: Reduction in value of capital assets over time.
- National Income (NI): NDP at factor cost, calculated as:
\[ \text{NI} = \text{NDP at Market Price} - \text{Indirect Taxes} + \text{Subsidies} \]

2. Given Values:

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

3. Calculating the National Income:

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

Final Answer:

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