Question

Calculate Net Value Added at Factor Cost (NVA_fc) from the following data: \[ \begin{array}{|c|l|c|} \hline \textbf{S.No.} & \textbf{Particulars} & \textbf{Amount (in Rs. lakh)} \\ \hline (i) & \text{Fixed capital goods (expected life span 5 years)} & 15 \\ \hline (ii) & \text{Domestic Sales} & 200 \\ \hline (iii) & \text{Change in stock} & 10 \\ \hline (iv) & \text{Exports} & 10 \\ \hline (v) & \text{Single use producer goods} & 120 \\ \hline (vi) & \text{Net indirect taxes} & 20 \\ \hline \end{array} \]

Hint:

Depreciation on fixed capital is subtracted from the total to calculate Net Value Added at Factor Cost.

Answer 1

Formula: \[ NVA_{fc} = (\text{Domestic Sales} + \text{Change in Stock} + \text{Exports}) - \text{Single Use Producer Goods} - \text{Depreciation} - \text{Net Indirect Taxes} \] Calculation: \[ NVA_{fc} = (200 + 10 + 10) - 120 - \left( \frac{15}{5} \right) - 20 \] \[ = 220 - 120 - 3 - 20 = 77 \text{ lakh} \] Thus, the Net Value Added at Factor Cost (NVA_fc) is Rs. 77 lakh.

Net Value Added at Factor Cost (NVAfc): 
\[ NVAfc = (ii) + (iii) + (iv) {Depreciation} (vi) \] 
\[ NVAfc = 200 + (10) + 10 3 20 = Rs.57 { lakh} \]