Interest-free loan provided by employer to employee will be included in national income or not?

Yes, the interest-free loan provided by the employer to the employee will be included in the national income. It is considered as a part of the employee's compensation package and hence, it will be added to the national income.

Reasons why interest-free loan provided by employer to employee is included in national income:

1. It is a form of compensation: An interest-free loan provided by the employer to the employee is considered as a form of compensation. It is a benefit that the employee receives from the employer in addition to their salary. Therefore, it is included in the national income.

2. It increases the purchasing power of the employee: The interest-free loan provided by the employer to the employee increases the purchasing power of the employee. This means that the employee can spend more money on goods and services, which in turn increases the demand for goods and services. This increased demand leads to an increase in the GDP and hence, the national income.

3. It is a transfer of funds: The interest-free loan provided by the employer to the employee is a transfer of funds from the employer to the employee. This transfer of funds is recorded as a part of the national income.

4. It is a form of investment: The interest-free loan provided by the employer to the employee is a form of investment. The employee uses this loan to either invest in a business or to purchase goods and services. This investment leads to an increase in the GDP and hence, the national income.

In conclusion, the interest-free loan provided by the employer to the employee is included in the national income. It is considered as a part of the employee's compensation package and has several positive effects on the economy.

Included only if it is taken for production purpose, not for consumption purpose