For decades, GDP has been the superstar statistic for countries - a kind of economic scoreboard where nations compete to flaunt their numbers and signal their economic muscle. It’s an easy way to track how much a country is producing and to compare it with others.
But in India, there’s a growing sense that this measure isn’t telling the whole story. Now, behind closed doors and in policy circles, there’s a real conversation brewing about moving away from GDP and switching to NDP - Net Domestic Product - as the primary way to judge the economy’s health.
At first glance, this might seem like a minor technical change, but in reality, it marks a fundamental shift in what the country values and how it plans for its future.
To really understand what’s at stake, it’s important to dig into what these numbers actually mean. GDP, or Gross Domestic Product, is the sum total of all goods and services produced within a country’s borders in a given period. It’s a snapshot of raw economic activity.
But there’s a glaring blind spot: GDP ignores the fact that things wear out. Over time, factories age, equipment becomes obsolete, roads get potholes, and infrastructure needs constant repair. These aren’t just minor accounting details, they represent real costs that eat into a country’s wealth.
NDP, or Net Domestic Product, addresses this by subtracting depreciation -the estimated value of all the stuff that’s worn out or used up- from GDP. So, NDP = GDP minus Depreciation.
When India looks at NDP, it’s asking a hard question: After we account for everything we’ve had to fix or replace, what value have we actually created that will last into the future?
Why is India considering this change now? It’s partly a response to international trends.
The United Nations has updated its guidelines, encouraging countries to adopt more accurate, meaningful ways to measure their economies, ways that don’t just reward activity for activity’s sake, but focus on what truly adds value.
India’s Ministry of Statistics and Programme Implementation has already formed a committee to explore how this transition could work, with plans to possibly adopt NDP as the main indicator by 2029 or 2030.
This isn’t just a technical update, it could reshape how policymakers, investors, and the public think about progress.
The underlying philosophy is clear: quality is more important than quantity. GDP can easily give a misleading impression of prosperity.
For example, if a government builds a bridge and it collapses five years later because of poor construction, GDP gets a boost both when the bridge is built and again when it’s rebuilt. But this doesn’t reflect real progress, just wasted resources and inefficiency.
NDP, on the other hand, penalizes such waste by factoring in the cost of replacing or repairing broken assets, pushing leaders to prioritize durability and smarter use of resources.
If India does make the shift to NDP, it would send a powerful message about the country’s priorities. It suggests a desire to move beyond chasing headline-grabbing growth rates and instead focus on sustainable, long-term development.
It’s about building an economy where investments last, infrastructure endures, and resources are used responsibly, not just burned through in pursuit of short-term gains. Leaders and planners would be encouraged to look at the true, net additions to the country’s wealth, not just the gross output.
