Gross Value Added ( GVA )
GVA is defined as the value of output less the value of intermediate consumption. It also represents the contribution of labor and the capital to production process.
Thus, the value of GVA can be derived from the GDP as follows:
GVA = GDP – Indirect Taxes + Subsidies
Gross Domestic Product ( GDP )
GDP is an estimate of the total value of all the final products and services produced in a given period by the production owned by a country’s citizen.
Final Goods and Services : It means that only the final, and not the intermediate, goods and services are taken into account for calculation of GDP.
Within the Domestic Economy: It means that the produce of resident citizens as well as foreign nationals who reside within that geographical boundary is considered.
GDP at Market Price
GDP at Market Price is market value of all the final goods and services produced within a domestic territory of a country during a financial year.
GDP at Factor Cost
GDP at Factor Cost refers to aggregate value of income earned from factors of production i.e. Land, Labor, Capital, and Entrepreneurship.
GDP at Factor Cost excludes indirect taxes but includes subsidies.
GDP at Factor Cost = GDP at Market Price – Indirect Taxes + Subsidies
Comparing GVA and GDP
| GVA | GDP |
| Value of all the goods and services produced within a country after deducting the value of intermediate goods and services. | Market value of all the final goods and services produced within the country. |
| Gives insight into the economy from the input or supplier side. | Gives insight into the economy from the output or consumer side. |
| Generally, calculated on a sector-wise approach. e.g. GVA for the Primary Sector, Secondary Sector, etc. | Calculated for the whole economy. (GDP of economy = GVA of all the sectors) |
| Generally, calculated at Basic Prices. | Generally, calculated at Market Prices. |
