Identify the net contribution made by a firm from the following:

Domestic sales + Export + Change in stock - value of intermediate consumption.

Value added.

The correct answer is Option (2) → Value added.

Note: The given answer is as per NTA. however, the answer to this question should be Gross Value added as explained below.

Value Added generally means the difference between a firm’s output and the value of intermediate goods used in producing that output. So,

Value Added=Value of Output−Intermediate Consumption

However, Value Added can be of two types depending on whether we subtract depreciation (capital consumption) or not:

• Gross Value Added (GVA) → before deducting depreciation.

• Net Value Added (NVA) → after deducting depreciation.

The question gives: Domestic sales + Export + Change in stock - value of intermediate consumption. 

This formula calculates the Value of Output minus Intermediate Consumption, without subtracting depreciation. Hence, it corresponds exactly to Gross Value Added, not Net Value Added.

“Value Added” is a generic term, but in national income accounting, when depreciation has not been subtracted, we must specify it as Gross Value Added (GVA).