Answer :
Calculating National Income by the Income Method
Question: Calculate the National Income by the income method from the following data:
Remuneration of employees: ₹15,000 crore
Rent: ₹5,000 crore
Profit: ₹25,000 crore
Interest: ₹5,000 crore
Depreciation: ₹1,000 crore
Gross domestic investment: ₹25,000 crore
Steps to Calculate National Income:
Understand the Components:
The income method adds up all the incomes earned by individuals and businesses in the economy.
The main components are: Remuneration of employees, Rent, Profit, and Interest.
Add Up the Incomes:
Start by adding the remuneration of employees (wages and salaries), rent, profit, and interest.
Ignore depreciation and gross domestic investment for now, as they are not part of the income method calculation directly.
Calculate National Income:
Remuneration of employees: ₹15,000 crore
Rent: ₹5,000 crore
Profit: ₹25,000 crore
Interest: ₹5,000 crore
Formula for National Income (NI):
NI
=
Remuneration of employees
+
Rent
+
Profit
+
Interest
NI=Remuneration of employees+Rent+Profit+Interest
Calculation:
NI
=
₹
15
,
000
crore
+
₹
5
,
000
crore
+
₹
25
,
000
crore
+
₹
5
,
000
crore
NI=₹15,000 crore+₹5,000 crore+₹25,000 crore+₹5,000 crore
NI
=
₹
50
,
000
crore
NI=₹50,000 crore
Answer:
The National Income is ₹50,000 crore.