Calculate(i) Gross Domestic Product at Market Price by Expenditure method and (ii) value of subsidies from the following data:
| Items | Amount (In crores) |
| Govt. final consumption expenditure | 3000 |
| Pvt. final consumption expenditure | 2000 |
| Net domestic fixed capital formation | 1800 |
| Imports | 50 |
| Exports | 150 |
| Indirect taxes | 250 |
| Change in stock | 200 |
| Consumption of fixed capital | 100 |
| Factor income from abroad | 700 |
| Factor income to abroad | 800 |
| National income | 7250 |
Dear student,
(i) GDPMP = Govt. final consumption exp. + Pvt. final consumption exp. + Net domestic capital formation + Depreciation + Change in Stock + Exports - Imports
GDPMP = 3000+2000+1800+100+200+150-50 = 7200
(ii) Now, given, NNPFC = 7250
and, from (i) we know GDPMP = 7200
We can write, NNPMP = 7200 (GDPMP) - 100 (Depreciation) + 100 (Factor income to abroad - Factor income from abroad) = 7200
Also, NNPMP - NNPFC = NIT = -50
and NIT = Indirect Taxes - Subsidies
So, -50 = 250 - Subsidies
or, Subsidies = 300
(i) GDPMP = Govt. final consumption exp. + Pvt. final consumption exp. + Net domestic capital formation + Depreciation + Change in Stock + Exports - Imports
GDPMP = 3000+2000+1800+100+200+150-50 = 7200
(ii) Now, given, NNPFC = 7250
and, from (i) we know GDPMP = 7200
We can write, NNPMP = 7200 (GDPMP) - 100 (Depreciation) + 100 (Factor income to abroad - Factor income from abroad) = 7200
Also, NNPMP - NNPFC = NIT = -50
and NIT = Indirect Taxes - Subsidies
So, -50 = 250 - Subsidies
or, Subsidies = 300