Sign up now
to enroll in courses, follow best educators, interact with the community and track your progress.
GVA, Factor cost, Market price and Basic prices
1,718 plays

This lesson discusses about the factor cost,market price and basic prices.

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

Unacademy user
bohut accha hai sir. Extremely helpful from exam perspective
  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