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Generate QuizWhen calculating Gross Value Added (GVA) at basic prices, which of the following components is explicitly included, unlike in the older GDP at factor cost methodology?
- Net indirect taxes (Indirect taxes minus subsidies)
- Production taxes (like stamp duty and property tax) net of production subsidies
- Product taxes (like GST and excise duty) net of product subsidies
- Net factor income from abroad
Answer: Production taxes (like stamp duty and property tax) net of production subsidies
In 2015, India aligned its national accounts with the UN's System of National Accounts (SNA) 2008. It shifted from GDP at Factor Cost to GVA at Basic Prices. GVA at basic prices includes 'production taxes' (taxes paid irrespective of the volume of production, like land revenue or stamp duty) but excludes 'product taxes' (taxes proportional to output, like GST). This provides a purer measure of the producer's actual value addition.