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GVA, Factor cost, Market price and Basic prices
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This lesson discusses about the factor cost,market price and basic prices.

Arpita Prakash
YouTuber NCERTs series initiator at Unacademy 'Educator of the Month' for Feb'19 CBSE 0.1% Merit Certificate holder in Mathematics

Unacademy user
be prepared for Reasoning. it will going though in exam.. all the best guys
  1. o Most highlighted measure of National Income- GDP at factor cost o CSO of Gol reports GDP at factor cost and at market price 2015 Revision-CSO replaced GDP at factor cost with GVA at basic prices o At present- most highlighted measure- GDP (GDP at market prices) GVA- Gross Value Added o Value of total output produced in economy - value of intermediate consumption Distinction between factor cost, basic prices and market prices is based on distinction between net production taxes ( production taxes- production subsidies) and net product taxes ( product taxes- product subsidies) . Production taxes & subsidies- paid/ received in relation to production & are independent of volume of production (land revenues, registration fees etc) Product Taxes and subsidies- paid/ received per unit or product (Eg : Excise tax, service tax etc)

  2. . Factor cost-> includes only payment to factors of production; no taxes are included . Market price-> Factor cost+ total indirect taxes- total subsidies Basic prices-> include production taxes (-production subsidies ); but not product taxes ( product subsidies) . Market prices-> Product taxes (- production subsidies) + basic prices . GVA at basic prices includes net production taxes but not net product taxes . GVA at factor costsNet production taxes - GVA at basic prices . GDP at market price- GVA at basic prices +net product taxes