Question

Depreciation rate in national accounts india

Answer 1

In economics, depreciation is the gradual decrease in the economic value of the capital stock of a firm, nation or other entity, either through physical depreciation, obsolescence or changes in the demand for the services of the capital in question. If the capital stock is {\displaystyle K_{t}} in one period {\displaystyle t}, gross (total) investment spending on newly produced capital is {\displaystyle I_{t}} and depreciation is {\displaystyle D_{t}}, the capital stock in the next period, {\displaystyle K_{t+1}}, is {\displaystyle K_{t}+I_{t}-D_{t}}. The net increment to the capital stock is the difference between gross investment and depreciation, and is called net investment.