Q.From the following data (all figures in Rs crore), calculate National Income (NNP at Factor Cost) by the income method: Compensation of Employees = 2,00,000; Rent = 30,000; Interest = 40,000; Profit = 50,000; Mixed Income of Self-Employed = 1,80,000; Net Factor Income from Abroad = (–) 5,000.

This applies the income-method formula: sum the domestic factor incomes, then adjust for net factor income from abroad to move from a domestic to a national aggregate. …

The income method first sums domestic factor incomes:

Substituting the given figures (Rs crore):

Step 1 — running total: $2{,}00{,}000 + 30{,}000 = 2{,}30{,}000$; $+40{,}000 = 2{,}70{,}000$; $+50{,}000 = 3{,}20{,}000$; $+1{,}80{,}000 = 5{,}00{,}000$.

So Domestic Factor Income (NDP at Factor Cost) = Rs 5,00,000 crore.

Step 2 — add Net Factor Income from Abroad to convert the domestic aggregate into the national one: …

Students often forget that Net Factor Income from Abroad must be added AFTER summing the purely domestic components — omitting it entirely leaves you with NDP at factor cost, not Na …