×

UPSC Courses

DNA banner

DAILY NEWS ANALYSIS

  • 04 March, 2021

  • 4 Min Read

Gross Domestic Product vs Gross Value Added

Gross Domestic Product vs Gross Value Added

Gross Domestic Product

  • Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period.
  • GDP includes all private and public consumption, government outlays, investments, private inventories, paid-in construction costs and the foreign balance of trade (exports are added, imports are subtracted)
  • Thus the components of GDP are Consumption (C) plus Investment (I) plus Government Spending (G) plus BOP i.e. Exports minus Imports (X-M)
  • GDP is calculated using this standard formula: C + I + G + (X-M).
  • GDP is commonly used as an indicator of the economic health of a country, as well as to determine a country’s standard of living
  • Since the mode of measuring GDP is uniform from country to country, GDP can be used to compare the productivity of various countries

Gross Value Added

  • The term that is used to denote the net contribution made by a firm is called its value-added
  • The raw materials that a firm buys from another firm which are completely used up in the process of production are called ‘intermediate goods’.
  • Therefore the value added of a firm is, the value of production of the firm – the value of intermediate goods used by the firm.
  • Gross value added (GVA) is defined as the value of output less the value of intermediate consumption.
  • When the value of taxes on products (less subsidies on products) is added, the sum of value added for all resident units gives the value of gross domestic product (GDP).
  • Thus, Gross value added (GVA) = GDP + subsidies on products – taxes on products

GDP vs. GVA

  • Gross value added (GVA) is the value addition done to a product resulting in the production of final product whereas Gross Domestic Product (GDP) is the total value of products produced in the country.
  • While GDP gives a picture of the whole economy, GVA gives pictures at enterprises, government and households levels.
  • In other words, GDP is the GVA of all enterprises, governments and households.

Source: AspireIAS Notes


Demography Of India

Demography Of India In 2022, China will see an absolute population loss for the first time, and by 2023, when India's population reaches 1,428.63 million, it will have surpassed China's 1,425.67 million. What Influences Population Change? TFR: Total Fertility Rate In the past three decades, TFR has decreased for India.

Election Commission Of India

Election Commission Of India The Chief Election Commissioners' terms have decreased from more than eight years in the 1950s to less than three hundred days since 2004, according to a recent ruling by the Supreme Court, which asserted that the government only declares its support for the independence of election commissioners on the lips.

Climate Change Performance Index 2023

Climate Change Performance Index 2023 The Climate Change Performance Index (CCPI) 2023 places India eighth. India was ranked tenth in the CCPI 2022. What is the CCPI? Since 2005, Germanwatch, the New Climate Institute, and the Climate Action Network have published an annual report. It is an independent monitoring tool for track

Coal: Dominant energy source in India

 Coal: Dominant energy source in India Despite efforts to transition to renewable energy, coal will continue to be India's dominant energy source. What is the country's current energy capacity? According to Climate Action Tracker projections, fossil fuel accounts for more than half of the country's installed energy capa

Norms to Prevent False Online Reviews

Norms to Prevent False Online Reviews The Department of Consumer Affairs recently announced new regulations to protect consumers from "false and misleading reviews." It is part of the Bureau of Indian Standards norms, which will go into effect on November 25. Important Guidelines: E-commerce platforms will be required t

Toppers

Search By Date

Newsletter Subscription
SMS Alerts