India Set to Redefine Economic Measurement: GDP May Give Way to NDP

New Delhi: India is preparing for a major shift in how it measures its economic performance. Traditionally, the country has relied on Gross Domestic Product (GDP) as the primary indicator of economic health. Now, the government is considering giving greater importance to Net Domestic Product (NDP), a measure that accounts for depreciation of assets and depletion of natural resources, under the United Nations’ System of National Accounts (SNA) 2025 framework.

Why NDP?
According to the Economic Times, SNA 2025 regards NDP as “conceptually superior” to gross measures like GDP. Unlike GDP, which measures total production, NDP deducts the value lost due to wear and tear of fixed assets (depreciation) and the consumption of natural resources (resource depletion). This provides a more accurate picture of the true cost of production and helps assess how much of the country’s assets are being consumed versus preserved for future growth.

Current Scenario
At present, GDP remains the primary metric globally, including in India. The country currently publishes annual NDP estimates alongside GDP, but quarterly NDP figures are not released. For instance, India’s GDP growth rate in Q2 2025-26 stood at 8.2%, the highest in the last six quarters, while both GDP and NDP grew by 6.5% for 2024-25 compared to the previous year.

How NDP is Calculated
NDP is derived by subtracting depreciation of fixed assets and natural resource depletion from GDP. Depreciation refers to the reduction in value of capital assets used in production, while resource depletion measures the decline in natural resources and the associated economic loss. By tracking NDP, policymakers can better understand how much of the nation’s wealth is being consumed and how much is preserved for the future.

Government Plan
The Ministry of Statistics and Programme Implementation (MoSPI) is reviewing data and methodologies to implement this change. A sub-committee under the National Accounts Advisory Committee has been formed to guide the process. Officials aim to fully adopt the NDP framework by 2029-30, in line with IMF guidelines.

In addition, MoSPI is updating the GDP base year from 2011-12 to 2022-23. The revised series, based on the SNA 2008 framework currently used internationally, is scheduled to be released on 27 February 2026.