Under double deflation, which two items are deflated separately to arrive at real Gross Value Added?

The correct answer is output and intermediate consumption. Double deflation is a production-side technique: gross output is deflated with one price index and intermediate consumption with another, and real Gross Value Added is what remains after subtracting the second from the first. India now applies it to industries in the manufacturing sector, and the IMF describes it as the preferred method for measuring GDP in volume terms. Option B is wrong because exports and imports belong to the expenditure side of the accounts and are not what this method separates. Option C is wrong because wages and profits are components of the income approach, not quantities that are deflated in this exercise. Option D is wrong for the same reason as B: private final consumption expenditure is a measure of final demand, and the backgrounder says plainly that double deflation does not enter its calculation because final demand has no intermediate consumption to subtract.