Manufacturing value added
Also called: MVA · Topic: Sectors of the Indian Economy · NCERT: Beyond NCERT
Meaning
Manufacturing value added (MVA) measures manufacturing's net contribution to GDP. Intermediate inputs are goods that get used up in production, such as raw materials and parts. Subtracting them avoids counting them twice. MVA = manufacturing gross output − intermediate inputs. MVA is the key number in the "missing middle" debate: whether India's factories are large enough to absorb its surplus farm workers.
Example
A garment unit sells shirts worth ₹10 lakh and uses cloth and thread worth ₹7 lakh, so its value added is ₹3 lakh. At the national level, India's MVA is about 13-17% of GDP, compared with about 25-27% for China (World Bank WDI/NAS).
Don't confuse with
- Gross output: this is the total value of what factories sell, including the inputs they bought. It overstates manufacturing's real contribution. MVA counts only the value the factories add.