How to get edge in National Income Accounting (2)

How to determine National Income by Value Added Method


The first step is to determine Gross Value added at market Price.


GVAmp =Value of Output - Intermediate Consumption


Value of Output = Sales + Change In stock


Intermediate Consumption = Purchase of Raw material.


So


GVAmp =Sales + Change in Stock-Intermediate Consumption


Few things to remember -:


Sales = Domestic Sales+ Exports


Purchase of Raw material = Domestic Purchase + Imports


If Sales is given then no need to add exports as sales include Exports.

or the Expanded Farmula may be


GVAmp =Sales + Change in Stock-Intermediate Consumption


GVAmp = ( Domestic Sales + Exports) + Change in Stock-Intermediate Consumption


GVAmp = [( Domestic Sales + Exports) + Change in Stock] -(domestic purchase of raw material + Imports)
   Purchase of machinery  is not considered as intermediate consumption as it is not for resale.



If GVAmp of all the firms is determined in the economy it becomes GDPmp



NNPfc = GDPmp - Depriciation + NFIFA  - NIT