Which of the following will be included in the National Income of India ?

(A) Donations given to a religious institution.

(B) Payment of Income Tax

(C) Scholarship given to students

(D) Profits earned by an Indian company from its branch in France

(E) Purchase of a television set by a consumer household

Choose the correct answer from the options given below:

The correct option is '3) (D) and (E) Only'.

Key Points

• Donations given to a religious institution.
  • This is incorrect.
  • Donations given to religious institutions are considered transfers and do not contribute to the production of goods and services in an economy. Therefore, they are not included in the National Income.
• Payment of Income Tax
  • This is incorrect.
  • Income tax payments are a transfer from households to the government. Such transfers do not reflect the economy's production activity and, as such, are excluded from the National Income calculation.
• Scholarship given to students
  • This is incorrect.
  • Scholarships are also considered transfers and do not represent the production of goods or services within an economy. Hence, they are not included in the calculation of National Income.
• Profits earned by an Indian company from its branch in France
  • This is correct.
  • Profits earned by an Indian company from its operations abroad are included in the National Income of India. This is because these profits are a part of the income earned by residents of a country from their overseas investments or business activities, contributing to the country's GDP by the income approach.
• Purchase of a television set by a consumer household
  • This is correct.
  • The purchase of a television set by a consumer household is a part of the final consumption expenditure in the economy. Such expenditures are included in the National Income as they reflect the economy's production of goods and services consumed by households.

Hence, Statements (D) and (E) are correct and included in the National Income of India.