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NDP & GDP are two indicators used to conduct global market research to know changing patterns of commodity production and consumption output of a country regardless of the factors that the goods or services are produced inside the country’s border, or made by a foreign company.
GDP is related to the economics of financial markets - the monetary value of goods and NDP takes into account the capital consumption allowance and measures the depreciation of the capital goods of a country.
For example - the production of cars by any factory excludes foreign shareholders of the company but the profit made by the company is included in the national income.
NDP is considered better indicators than GDP as it can be used to reveal the amount of money spent on improving obsolete equipment to secure the production level.
It is extracted by subtracting depreciation from GDP. The increase in depreciation can push GDP but it does not indicate the growth in the social and economic well being of the country but it only considers the value of finished products made in the specific geographical region.
The same term can also be calculated for individual units through the income approach that comes through wages, supplementary labor salaries, profits of corporations/government organization, interest, and income from farms / other businesses and tax-less subsidies.
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