Gross vs. Net – Indian Economy UPSC Notes
Gross and Net are terms that describe measurements of economic variables before and after certain adjustments. These terms are most commonly used in t
In economics, Gross and Net are terms that describe measurements of economic variables before and after certain adjustments. These terms are most commonly used in the context of National Income Accounting . 1. Gross vs. Net : General Concept Gross refers to the total value or measurement of a variable without any deductions or adjustments. Net refers to the value after making certain adjustments or deductions , such as depreciation or capital consumption. 2. Gross vs. Net in National Accounts : The Gross and Net terms are used frequently in measuring national income and economic output. The difference usually comes from whether depreciation is accounted for or not. a) Gross Domestic Product (GDP) vs Net Domestic Product (NDP) : Gross Domestic Product (GDP) measures the total market value of all final goods and services produced within a country’s borders within a given time period (usually annually or quarterly) without adjusting for depreciation . Example : If a country produces ₹10,000 crore worth…