Briefly explain the following basic concepts related to NI:
Net Factor Income from Abroad (NFIA)

Net Factor Income from Abroad (NFIA)
Simply put, NFIA is the difference between factor income received from abroad and factor income paid abroad. Simply put it is the difference between the factor income earned from abroad by normal residents of a country (say India) and the factor income earned by non-residents (foreigners) in the domestic territory of that country (i.e. India). CSO defines it as 'Income attributable to factor services rendered by the normal residents of the country to the rest of the world, less factor services rendered to them by the rest of the world.' Symbolically:
NFIA = Factors income earned from abroad by residents - Factor income of non-residents in domestic territory
The normal residents of a country earn factor income not only within the domestic territory of a country but outside it also. Income from outside can be earned mainly in two ways, namely, (i) income from work, and (ii) income from property and entrepreneurship as shown below. Mind, it is a two-way affair since foreigners also earn similar income by working in domestic territory of other country.
(i)    Income from work (Compensation of employees). Income from work can be earned by working in the domestic territories of other countries earning thereby wages and salaries (or compensation of employees). For instance, suppose in 2006-2007, Indian resident scientists, engineers, doctors, dancers, masons, carpenters employed abroad earned factor income of र 10,000 crores whereas similar payments made to non-resident workers employed in domestic territory of India was to the tune of र 8,000 crores. Net compensation of employees from abroad to India would be र 2,000 (10,000 - 8,000) crores.
(ii)    Income from property and entrepreneurship (Rent, interest, profit). Factor income from abroad is also earned by owning property (like buildings, shops, factories, financial assets like bonds and shares in foreign countries) earning thereby rent and interest, Also profit is earned for undertaking entrepreneurial activities of producing goods and services. For instance suppose in 2006-2007, normal residents of India living temporarily abroad earned र 25,000 crores by way of rent, interest and profit and similar payments made to the rest of world were, say र 20,000 crores. Net income from property and entrepreneurship from abroad would be र 5,000 (25,000 - 20,000) crores.
(iii)    Net retained earning of resident companies abroad. This refers to the difference between retained earnings of foreign companies located in a country and the retained earnings of resident companies located abroad. Retained earning of a company is in fact its 'undistributed profit'. For instance suppose in 2006-2007, Indian companies working abroad, after paying profit tax and distributing dividend out of their total profits, retained the balance profit (known as Reserve fund or Undistributed profit) of र 50,000 crores and foreign companies in India retained similar profit of र 65,000 crores. Net retained earning of resident companies abroad would be र (-) 15,000 (= 50,000 - 65,000) crores.
From above-mentioned data, India's net factor income from abroad in 2006-2007 would be equal to र -8,000 [= 2,000 + 5,000 + (-15,000)] crores.
Components of net factor income from abroad. These are as under:
(i)    Net compensation of employees.
(ii)    Net income from property and entrepreneurship (rent, interest, profit).
(iii)    Net retained earning of resident companies abroad.
Significance. Net factor income from abroad is used to differentiate between National income and Domestic income. By adding NFIA to domestic income, we get national income. Symbolically:
National income = Domestic income + NFIA
Domestic income = National income - NFIA