Identify and explain the concept : Vrinda receives monthly pension of ₹ 5000/- from the state government.
Q.2 (A) (v) Identify and explain the concept : Vrinda receives monthly pension of ₹ 5000/- from the state government.
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Answer: Transfer payment
Concept: Transfer payment. Explanation: Transfer payments are payments received without rendering any productive service in return in the current period, e.g. old-age pension, unemployment allowance, scholarships. They are only a transfer of income from one person to another, so they are not included in national income (to avoid double counting). Vrinda’s monthly pension from the state government is a transfer payment. (For the government, pension is a non-development revenue expenditure.)
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· 28 Oct 2026
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