Question
How will you treat the following while estimating domestic factor income of India? Give reasons for your answer.
(i) Remittances from non-resident Indians to their families in India.
(ii) Rent paid by embassy of Japan in India to a resident Indian.
(iii) Profits earned by branches of foreign bank of India.
Solution
(i) Not included because remittances amount has not been generated in domestic territory of India.
(ii) Not included as embassy of Japan though located in India is treated as a part of its own country, i.e., Japan.
(iii) Profits are included because they are earned in domestic territory of India.
