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Question : 16
Total: 18
Will the following be included in the domestic product of India? Give reasons for your answer.
(a) Profits earned by foreign companies in India.
(b) Salaries of Indians working in the Russian Embassy in India.
(c) Profits earned by a branch of State Bank of India in Japan.
(a) Profits earned by foreign companies in India.
(b) Salaries of Indians working in the Russian Embassy in India.
(c) Profits earned by a branch of State Bank of India in Japan.
Solution:
(a) Profit earned by foreign companies in India : Yes, it is included in domestic income of India because profits are earned by the company within India's domestic territory irrespective of ownership of the company.
(b) Salaries of Indians working in Russian embassy in India : No, it is not included in domestic product of India because Russian embassy in India is not a part of domestic teritory of India (but a part of domestic territory of Russia).
(c) Profits earned by a branch of State Bank of India in Japan : No, it is not included in domestic income of India because it is not earned in Indian domestic territory.
(b) Salaries of Indians working in Russian embassy in India : No, it is not included in domestic product of India because Russian embassy in India is not a part of domestic teritory of India (but a part of domestic territory of Russia).
(c) Profits earned by a branch of State Bank of India in Japan : No, it is not included in domestic income of India because it is not earned in Indian domestic territory.
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