Q.Calculate National Income (NNP at factor cost) from the following: GDP at market price = ₹8,000 crore; Net factor income from abroad = ₹(−100) crore; Depreciation = ₹500 crore; Indirect taxes = ₹900 crore; Subsidies = ₹200 crore.

Move from GDP-MP to National Income by applying all three adjustments in turn: add NFIA, subtract depreciation, then subtract net indirect taxes.

$= 8{,}000 - 100 - 500 - (900 - 200) = 8{,}000 - 100 - 500 - 700 = 6{,}700$ crore.

Given: $GDP_{MP} = 8{,}000$, $NFIA = -100$, Depreciation $= 500$, Indirect taxes $= 900$, Subsidies $= 200$ (all in ₹ crore).

Step 1 — GDP-MP to GNP-MP (add NFIA).

Step 2 — GNP-MP to NNP-MP (subtract depreciation).

Step 3 — NNP-MP to NNP-FC = National Income (subtract net indirect taxes). Net indirect taxes $= 900 - 200 = 700$.

Verification (independent re-solve, adding all adjustments at once): $8{,}000 - 100 - 500 - 700 = 6{,}700$ crore — same result.

Single-line method: apply all three adjustments to GDP-MP simultaneously: $NI = GDP_{MP} + NFIA - \text{Depreciation} - (\text{Indirect Taxes} - \text{Subsidies}) = 8{,}000 - 100 - 500 - 700 = ₹6{,}700$ crore. This is quicker but the step-by-step method makes it easier to spot which adjustment was applied wrongly if the answer is off.

Two frequent slips: (i) forgetting that NFIA here is negative, and adding +100 instead of −100; (ii) using indirect taxes (900) instead of net indirect taxes (900 − 200 = 700). Always compute net indirect taxes first, and respect the sign of NFIA.