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Economics · 2025 · 3 marks
National Income AccountingCircular Flow of Income and Methods of Calculating National Income3 marksApplyshort answer
CBSE 2025 · Region 5 · Set 3 · Q12
(a) State the steps pertaining to the estimation of National Income, under the Value Added Method.
State the steps pertaining to the estimation of National Income, under the Value Added Method.
On the basis of the following hypothetical data, calculate the percentage change in Real Gross Domestic Product (GDP) in the year $\displaystyle 2022$ – $\displaystyle 23$, using $\displaystyle 2020$ – $\displaystyle 21$ as the base year.
(All figures in ₹ crore)
| Year | Nominal GDP | Nominal GDP (Adjusted to Base Year Price) |
| $\displaystyle 2020$ – $\displaystyle 21$ | $\displaystyle 3,000$ | $\displaystyle 5,000$ |
| $\displaystyle 2022$ – $\displaystyle 23$ | $\displaystyle 4,000$ | $\displaystyle 6,000$ |
Marking-scheme solution
Steps pertaining to the estimation of National Income under the Value Added method:
1. Identify and classify production units into distinct heads namely primary, secondary, and tertiary sector.
2. Estimate the Gross Value Added of each sector by subtracting the value of Intermediate Consumption from the Value of Output and add Gross Value Added of each sector to arrive at Gross Domestic Product at Market Price.
3. Finally, estimate and deduct the value of Depreciation, Net Indirect Taxes and add Net Factor Income from Abroad to arrive at National Income (NNP$\displaystyle _{FC}$).
Percentage change in Real Gross Domestic Product (GDP) in the year $\displaystyle 2022$-$\displaystyle 23$
$$= \frac{\textbf{Change in Real GDP}}{\textbf{Real GDP}} \times 100$$
$$= \frac{6000-5000}{5000} \times 100$$
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CBSE Class 12 Economics past-paper question from the 2025 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.