Economics · National Income Accounting
An economist is analyzing the Indian economy's performance and is particularly focused on understanding the contribution of the manufacturing sector. She collects data on the total value of final goods produced by manufacturing units (5,000 crore), the cost of raw materials and utilities consumed (2,000 crore), and the net taxes on products (100 crore). Which statement accurately defines Gross Value Added (GVA), and what is the calculated GVA for the manufacturing sector in this scenario?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Gross Value Added (GVA) is the total income earned by the factors of production, and the calculated GVA is 7,000 crore.
- 2Gross Value Added (GVA) is the value of output minus the value of intermediate consumption. The calculated GVA is 3,000 crore.✓
- 3Gross Value Added (GVA) is defined as Gross Domestic Product (GDP) minus Net Indirect Taxes. The calculated GVA is 3,100 crore.
- 4Gross Value Added (GVA) is the final market price of all goods and services produced, and the calculated GVA is 5,100 crore.
Correct answer
Gross Value Added (GVA) is the value of output minus the value of intermediate consumption. The calculated GVA is 3,000 crore.
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