Value added indicates the increased value given to a good/service from a process. Here, the value addition can be measured from the difference between value of input purchased and the value of output sold. For example, imagine that a baker buys Wheat flour worth of Rs 50 and creates Rs 80 worth of bread. Through is baking activity, he makes a value addition of Rs 30 (80-50). Value addition is the income he created out of his own activities.
