GDP-GVA (Syllabus: GS Paper 3 – Economy)

Context: A senior government official recently attributed the divergence in gross domestic product (GDP) and gross value added (GVA) data for the third quarter of FY24 to reduced fertilizer subsidy disbursements.

• India's GDP spiked to a six-quarter high of 8.4% in Q3 FY24, surpassing estimates, while GVA growth stood at 6.5% during the same period, according to data from the statistics ministry.

Gross Domestic Product (GDP)

• About: The GDP is the total market value of all final goods and services in an economy.
• Country performance can be evaluated by comparing GDP figures from one year to another and by comparing them to other nations.
• Types of GDP

oGrowth of GDP: It can be either due to increase in actual production or due to increase in prices of goods and services or combination of both the above two factors.

oNominal GDP: It is the value of GDP at the current prevailing prices.

oReal GDP: It is the value of GDP at some constant set of prices.

• Factors: Land, Labour, Capital and Management within the domestic boundaries of a country.
• Formula: GDP = Consumption + Investment + Government Spending + Net Exports.