Depreciation is deducted from GDP to calculate NDP because capital goods lose value over time due to regular use, aging, and technological obsolescence. GDP includes total production without considering this loss, which can overstate the actual economic well-being. By subtracting depreciation, NDP shows the net value of goods and services produced after replacing worn-out capital assets. This adjustment helps economists assess how much of the production contributes to genuine economic progress rather than merely compensating for asset deterioration. Therefore, NDP offers a clearer view of long-term economic sustainability.