(a) State the steps pertaining to the estimation of National Income by Expenditure Method. (b) "In the past few decades, Indian economy has been fairly benefitted by positive externalities created by rapid rise in infrastructure." Justify the given statement with valid arguments.

Question

Accepted Answer

(a) Steps for Expenditure Method:
Step 1: Identify economic units incurring final expenditure: households, government, firms, and rest of the world.
Step 2: Classify final expenditure into PFCE, GFCE, GDCF, and Net Exports. Sum to get GDP_MP.
Step 3: Subtract Depreciation and Net Indirect Taxes from GDP_MP to get NDP_FC.
Step 4: Add NFIA to get National Income (NNP_FC).