Question
Given the following economic indicators for a household
sector in 2026 (in ₹ Crores): · Private Income: 8,500 · Corporate Profit Tax: 800 · Undistributed Profits (Retained Earnings): 500 · Direct Taxes paid by households: 1,200 · Miscellaneous Receipts of Govt. Depts: 200 Calculate the Personal Disposable Income (PDI).Solution
Personal Disposable Income (PDI) is the portion of personal income that households can actually spend or save after fulfilling all compulsory payment obligations to the government. Personal Disposable Income = personal income – direct taxes – Miscellaneous receipts of govt. Personal Income (PI) represents the total income actually received by households. It is derived by subtracting corporate earnings that do not reach households from the total Private Income Personal income = private income – corporates profit tax – undistributed profits = 8500 – 800 – 500 = 7200 As such, personal disposable income = 7200 – 1200 – 200 = Rs.5800 crore
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Inculcate
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