Question
How will you treat the following while estimating national income of India? Give reasons.
(i) Dividend received by a foreigner from investment in shares of an Indian company.
(ii) Profits earned by a branch of an Indian bank in Canada.
(iii) Scholarship given to Indian students studying in India by a foreign company.
Solution
(i) It will be deducted from domestic income to get national income because it is factor income to abroad.
(ii) It will be included in national income because it is factor income from abroad.
(iii) It will not be included in national income because scholarship is a transfer payment.
