Will India Consider NDP Over GDP to Measure Growth?

India is considering adopting Net Domestic Product (NDP) over Gross Domestic Product (GDP) as the main indicator of growth, according to reports. The move follows the advice of the upcoming System of National Accounts 2025 (SNA 2025), which sets global standards for compiling national income statistics, to give more weight to net measures of output rather than gross measures. If the government replaces the current framework with a new way of measuring the economy, the country's long-term development vision, known as Viksit Bharat, may undergo a significant change.

Difference Between GDP and NDP
GDP, or Gross Domestic Product, is the entire worth of all the goods and services produced in a country during a certain period of time. The GDP does not factor in the deterioration of machinery, buildings, and other capital assets utilised in the production process.
NDP, or Net Domestic Product, on the other hand, is the difference between GDP and the value of capital assets that have lost value over time because of usage or depletion. This enables the system to provide a clearer picture of the actual income left for households and businesses after accounting for the cost of maintaining and replacing assets.

India already publishes NDP figures alongside GDP, but GDP has always been the headline number. The difference between the two is substantial. In the financial year 2024-25, India's GDP was estimated at Rs. 330.7 lakh crore. However, after subtracting the depreciation of nearly Rs. 37 lakh crore, the NDP stood at Rs. 293.9 lakh crore.
The previous year showed a similar pattern. In 2023-24, GDP was Rs. 301.2 lakh crore, while NDP was Rs. 267.6 lakh crore, reflecting a gap of about Rs. 33.6 lakh crore.
This difference matters because NDP highlights the real resources available to people and firms, whereas GDP can sometimes exaggerate growth by ignoring the costs of maintaining capital.

Why the Shift Matters Globally
The SNA 2025 framework calls for adopting the net measures like NDP, citing its reliability with its accuracy in measuring sustainable growth. Policymakers worldwide prioritise growth calculated based on durability and inclusivity rather than just headline production numbers. By adopting NDP as the main measure, India can have a more realistic picture of the economy, particularly in sectors where depreciation is high, such as infrastructure and heavy industry.
However, officials have indicated that a major shift is unlikely to happen immediately because a move to NDP as the primary growth indicator would need a full overhaul of India's national accounts, which may happen sometime after 2029. Meanwhile, India is set to adopt a significant statistical update in February 2026, when the government will release a new GDP series, changing the base year from 2011-12 to 2022-23. This update is expected to incorporate more modern data sources, including vehicle registrations through the e-Vahan system and digital transactions through UPI.
The new series is also expected to address concerns raised by institutions such as the International Monetary Fund, which has questioned the reliability of India's current growth estimates.

Viksit Bharat
If India eventually adopts NDP as its headline growth measure, the numbers may appear lower than GDP figures. But they would provide a more accurate reflection of the income available for citizens and businesses. This shift could mark a turning point for the government's Viksit Bharat vision, which aims to build a developed and sustainable economy. It would signal that India is not only chasing higher output but also focusing on long-term prosperity and well-being.