Calculate Gross National Product (GNP) at Factor Cost (FC) using the following data:
| Particulars | ₹ in Crores |
|-------------|-------------|
| Net Domestic Product (NDP) at Market Price (MP) | 25000 |
| Consumption of Fixed Capital | 5000 |
| Subsidies | 30 |
| Factor Income from Abroad | 400 |
| Factor Income to Abroad | 600 |
Answer (2)
To calculate the Gross National Product (GNP) at Factor Cost (FC), we need to use the following formula:
GNP at Factor Cost = NDP at Market Price + Factor Income from Abroad − Factor Income to Abroad + Subsidies − Indirect Taxes
Step-by-Step Calculation:
NDP at Market Price (MP): This is given as ₹25000 crores.
Factor Income from Abroad: This refers to the income residents receive from abroad, which is ₹400 crores in this case.
Factor Income to Abroad: This is the income paid to foreign residents, amounting to ₹600 crores.
Subsidies: These represent payments made by the government to support businesses, worth ₹30 crores here.
Consumption of Fixed Capital: Although it’s given as ₹5000 crores, it's used to convert NDP to GDP but not required directly in our current formula.
To find GNP at Factor Cost without indirect taxes (as it's not provided), we'll consider NDP is approximately GNP when indirect taxes are not separately provided.
Calculation: Using the formula: GNP at Factor Cost = 25000 + 400 − 600 + 30 GNP at Factor Cost = 25000 + 400 − 600 + 30 = 24830 crores
Therefore, the Gross National Product at Factor Cost is ₹24830 crores.
The Gross National Product (GNP) at Factor Cost is calculated to be ₹24830 crores using the formula which adjusts the Net Domestic Product at Market Price by factor incomes and subsidies. This includes the given values for NDP, factor incomes from and to abroad, and subsidies while ignoring indirect taxes as they were not provided. The final result is derived step-by-step to ensure accuracy in the calculation.
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