Gross Domestic Product (GDP): GDP of a country is defined as the total

monetary value of finished goods and services produced within the countrys
borders for a given time period usually on annual basis. GDP includes all the
private investment, public consumption, government expenditure,
investments and net exports
GDP can be calculated using the formula GDP = C + G + I + NX where C represents

Private consumption or consumer spending, G is government spending, I is

for countrys investment including business CAPEX and NX indicates net
exports (Exports minus imports)[1] .

GDP is usually used as an indicator to measure the health of an economy as

well as to measure countrys standard of living. As measuring of GDP is
uniform across countries, GDP can be used to compare productivity of
various countries with a high degree of accuracy.
But when comes to analyzing each sectors performance in comparison with
other sector within a country is not indicated by GDP. To overcome this we
use a measure called Gross Value Added (GVA).
Gross Value Added (GVA): GVA of a country is defined as the output of a
country less the intermediate consumption, which is the difference between
gross output and net output[2]
Sector-wise estimates of GVA are given in terms of basic price rather than at
factor cost.
GVA at basic prices = CE + OS/MI + CFC + Production taxes Production
subsidies. Therefore GVA at factor cost= GVA at basic prices (Production
taxes less production subsidies)[3]
Where CE: Compensation for employees, OS: operating surplus, MI: Mixed
income and CFC: consumption of fixed capital. The relationship between GDP
and GVA is as follows:
GDP at market place= GVA at basic prices + Product taxes Product subsidies
Production taxes or production subsidies are paid or received with relation to
production and are independent of the volume of actual production whereas product
taxes or subsidies are paid or received on per unit of product.

[1].http://www.investopedia.com/terms/g/gdp.asp
[2].http://www.investopedia.com/terms/g/gross-value-added.asp

[3].http://indiabudget.nic.in/es2014-15/echapvol2-01.pdf