In India, the most highlighted measure of national income has been the GDP at factor cost. The Central Statistics Office (CSO) of the Government of India has been reporting the GDP at factor cost and at market prices. In its revision in January 2015 the CSO replaced GDP at factor cost with the GVA at basic prices, and the GDP at market prices, which is now called only GDP, is now the most highlighted measure.
CSO releases GVA at basic prices. It includes the net production taxes but not net product taxes. In order to arrive at the GDP (at market prices) we need to add net product taxes to GVA at basic prices.
|GVA at basic prices= GVA at factor costs + Net production taxes|
GVA at market prices = GVA at basic prices + Net product taxes
|When such GVAs from all sectors (∑ GVA) are added together and adding taxes (product) and reducing subsidies (product), we can get the GDP (at market price). GVA thus shows the production contribution of a particular sector. |
Technically, GDP at Market Prices = ∑ GVA at basic prices + product taxes – product subsidies.