ForumIAS LATEST
- 03 July | Enrich Your Ethics Answers with GS Knowledge: IAS Rank 1 Shruti Sharma | Click Here to Watch →
- 04 July | The Reality of Writing UPSC Mains by Ayush Sinha | Click Here to Watch →
- 05 July | The Right Time to Start UPSC Answer Writing by IAS Rank 39 Rohin Kumar | Click Here to Watch →
- 06 July | Why You Should Prepare for Mains Before Prelims by IAS Rank 28 Prachi Honey | Click Here to Watch →
What is the difference between Gross Vs Net Terms used in economy?
Production factors such as machines, equipment, tools, factory buildings, tractors etc. depreciate over a period of time during the process of production. It may be the case that after certain time these capital goods needs replacement.
The capital used for the this wear and tear and is not part of any body’s income.
Thus we subtract depreciation from the gross then the remaining Value is called Net
Net = Gross – Depreciation
For Ex, If we need to calculate Net GDP, then we need to subtract depreciation from the GDP
Net GDP = GDP – Depreciation
Similarly, Net National Product (NNP) = GNP – depreciation
