Final Consumption Expenditure
In the national accounts, final consumption expenditure is the expenditure on goods and services that are used for the direct satisfaction of individual needs (individual consumption) or collective needs of members of the community (collective consumption).
It consists of two aspects:
- Household final consumption expenditure: It represents consumer spending and consists of the expenditure incurred by resident households on goods and services for individual consumption (eg. health, education, cars, etc)
- Government final consumption expenditure: It consists of the value of the goods and services produced by the government itself and the expenditure of the government in providing goods and services for the direct needs of the population - as social transfers in kind (eg. subsidies). A high government share in the provision of individual consumption goods and services is often found in countries known as welfare states.
In the national accounts, final consumption expenditure is the expenditure on goods and services that are used for the direct satisfaction of individual needs (individual consumption) or collective needs of members of the community (collective consumption).
It consists of two aspects:
- Household final consumption expenditure: It represents consumer spending and consists of the expenditure incurred by resident households on goods and services for individual consumption (eg. health, education, cars, etc)
- Government final consumption expenditure: It consists of the value of the goods and services produced by the government itself and the expenditure of the government in providing goods and services for the direct needs of the population - as social transfers in kind (eg. subsidies). A high government share in the provision of individual consumption goods and services is often found in countries known as welfare states.
SUBJECT Variables
TOTAL CONSUMPTION EXPENDITURE
- Government final consumption expenditure: It consists of the value of the goods and services produced by the government itself and the expenditure of the government in providing goods and services for the direct needs of the population - as social transfers in kind (eg. subsidies). A high government share in the provision of individual consumption goods and services is often found in countries known as welfare states.
- Private (Household) final consumption expenditure: It represents consumer spending and consists of the expenditure incurred by resident households on goods and services for individual consumption (eg. health, education, cars, etc).
- The total consumption expenditure in 2021-22 is estimated at ₹16,191,152 crore, an increase of 15.4% over the previous year.
- 17.5% (₹2,838,751 crore) of the total consumption expenditure in 2021-22 was by the government while 82.5% (₹13,352,401 crore) was by private households.
% OF GDP
- The total consumption expenditure in 2021-22 as a ratio of GDP dropped for the second consecutive year in a row. In 2021-22, the total consumption expenditure is estimated at 69.7% of India's GDP. This shows that the pace of expenditure is not in line with the growth of the economy.
- The government expenditure in 2021-22 is estimated at 12.2% of India's GDP. Government expenditure has seen a modest increase over the years, moving up from 10.3% of the GDP in 2016-17 to 12.2% estimated in 2021-22.
- The private/household expenditure in 2021-22 is estimated at 57.5% of India's GDP. Private/household expenditure is expected to decline for the second consecutive year in a row and is now at the lowest levels since at least 2013.
% OF TOTAL EXPENDITURE
- 17.5% of the total expenditure in 2021-22 was government expenditure while 82.5% was private/household expenditure.
- In comparison to 2013, the share of government expenditure in the total expenditure increased by 2.3% in 2021 while that of private/households has reduced by 2.3%.
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