Year

2017-18

2018-19

2019-20

2020-21

2021-22

Fixed Capital

328,588,927

346,606,975

364,135,165

369,438,562

372,635,444

Invested Capital

446,094,480

477,726,474

497,362,352

519,114,310

554,493,175

Total Persons Engaged (No.)

15,614,619

16,280,211

16,624,291

16,089,700

17,215,350

Total Emoluments

41,835,716

46,207,983

49,172,897

48,389,031

56,082,801

Input

660,520,215

774,377,980

749,755,617

719,206,541

987,917,996

Output

807,217,258

928,179,908

898,330,129

880,921,387

1,192,715,147

GVA

146,697,043

153,801,928

148,574,512

161,714,846

204,797,151

Depreciation

23,729,624

26,155,291

27,309,742

28,135,986

29,964,685

NVA

122,967,418

127,646,637

121,264,771

133,578,860

174,832,466

Definition

Value generated by industries or sectors through production activities.

Total value of all goods and services produced within a country's borders during a specific period, regardless of ownership.

Calculation

Measures value added at each stage of production, excluding intermediate consumption.

Includes value added by industries, taxes on products, and subsidies received. Can be calculated using the production, income, or expenditure approach.

Focus

Captures sectoral contributions to the economy's overall output.

Provides a broad measure of a country's economic performance.

Scope

Can be calculated at both sectoral and national levels.

Typically calculated at the national level.

Policy Implications

Offers insights into sectoral performance and productivity.

Widely used for international comparisons and policy-making, serving as an indicator of economic health.

GVA Calculation

GVA calculates national income from the supply side by adding up value added across different sectors.

GVA of a sector is defined as the value of output minus the value of its intermediary inputs, shared among factors of production.

Sectoral Analysis

GVA growth helps understand sectoral robustness or struggles, and GDP is derived from GVA data.

Provides information from a consumer or demand standpoint.

Relationship with GDP

GDP = (GVA) + (Taxes earned by the government) — (Subsidies provided by the government). GDP data is more useful for annual economic growth and international comparisons.

GDP comprises five components: gross investment, government investment, private consumption, government spending, and net foreign trade (exports - imports).

PRACTICE QUESTION

Q. Which of the following statements regarding Gross Value Added (GVA) and Gross Domestic Product (GDP) are correct?

1.GVA measures the value generated by industries or sectors through production activities, while GDP represents the total value of all goods and services produced within a country's borders during a specific period.

2.GDP can be derived from GVA data by adding taxes earned by the government and subtracting subsidies provided, highlighting the demand side of the economy.

3.GVA is more useful for sectoral analysis and understanding productivity, while GDP provides insights into overall economic performance and international comparisons.

4.GDP is calculated by subtracting GVA from total government spending and net foreign trade, neglecting taxes and subsidies.

Options:

A) 1, 2, and 3 only.

B) 2, 3, and 4 only.

C) 1, 3, and 4 only.

D) All of the above.

Correct Answer: A) 1, 2, and 3 only.

Explanation:

1. This statement is correct. Gross Value Added (GVA) measures the value generated by industries or sectors through production activities, focusing on the value added at each stage of production. Gross Domestic Product (GDP), on the other hand, represents the total value of all goods and services produced within a country's borders during a specific period, irrespective of the ownership of the factors of production. Both GVA and GDP provide different perspectives on the economy's output.
2. This statement is correct. GDP can indeed be derived from GVA data by adding taxes earned by the government and subtracting subsidies provided. This adjustment is necessary to account for taxes on production and imports, as well as subsidies on products, which affect the overall value of goods and services produced within the economy. Therefore, this statement accurately highlights the demand side of the economy in GDP calculation.
3. This statement is correct. GVA is indeed more useful for sectoral analysis and understanding productivity, as it provides insights into the value added by individual industries or sectors. GVA allows for a detailed examination of sectoral contributions to the economy and helps in identifying areas of strength or weakness. On the other hand, GDP provides a broader measure of overall economic performance and is commonly used for international comparisons. Therefore, both GVA and GDP serve different purposes in economic analysis.
4. This statement is incorrect. GDP is not calculated by subtracting GVA from total government spending and net foreign trade. Instead, GDP is derived from GVA data by adding taxes earned by the government and subtracting subsidies provided, as mentioned in statement 2. Therefore, this statement misrepresents the calculation method of GDP and is incorrect.

In summary, statements 1, 2, and 3 accurately describe aspects of Gross Value Added (GVA) and Gross Domestic Product (GDP), making them the correct choices. Statement 4 is incorrect as it provides a misleading calculation method for GDP.