Net Output

the part of the gross product that remains after subtracting the means of production consumed in the production process—raw materials, supplies, fuel, and power—and the amortization of fixed production assets. From the standpoint of the formation of value, net output is value newly created in the branches of material production (v + m). The total net output of all branches of material production constitutes the national income of society.

Net output is calculated for the various branches of material production, such as industry, construction, and agriculture. In industry, it is calculated as the difference between gross output and material production costs. In this calculation, the gross product of industry is based on industry’s prices, that is, the turnover tax is included. Net output is needed to calculate national income and to compile the balance of the national economy of the USSR. The net output of some branches of industry and enterprises may also be calculated on the basis of wholesale prices of enterprises —that is, exclusive of the turnover tax.

Net output in construction is calculated as the difference between the gross product of construction on the one hand and the material costs of construction and the capital repair of buildings and structures on the other. The gross product of construction is the value of work performed in new construction, in the expansion and modernization of existing enterprises, and in the capital repair of buildings and other structures. The material costs of construction include the cost of construction materials used, such as structures and units, fuel, and electric energy; the capital repair of buildings and structures involves the amortization of construction machinery and other fixed capital of construction organizations.

The net output of agriculture is the difference between the gross product of agriculture, calculated on the basis of gross turnover (including the value of output produced and consumed on the farm), and material production costs, whose value includes both raw materials and supplies purchased from outside sources and products produced on the farm, such as seed and fodder. Net output in other branches of material production is calculated as the difference between gross output and material production costs, with allowance made for the specific features involved in calculating these indicators in a given branch.

The net output of various branches of material production is calculated by state statistical agencies: the Central Statistical Board of the USSR and the central statistical boards of the Union republics. The calculations are made in terms of the prices actually in effect in a given year and in terms of comparable prices. Expressing net output in comparable prices provides a picture of its development. In the production method of calculation, a figure for net output in comparable prices is arrived at by subtracting material production costs (in comparable prices) from the gross product. In the distribution method, net output is calculated as the sum of wages (and other types of remuneration for labor), profits, the turnover tax, and other elements that make up net income. This method of calculation tests the accuracy of calculations based on the production method.

In 1976 the net output of industry, including the turnover tax, accounted for 52.6 percent of the national income created in branches of material production; the net output of agriculture, 16.5 percent; the net output of construction, 11.2 percent; the net output of transportation and communications, 6.3 percent; and the net output of the remaining branches, 13.4 percent.