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 2024-25 is estimated at ₹23,601,532 crore, an increase of 11.1% over the previous year.
- 14% (₹3,303,119 crore) of the total consumption expenditure in 2024-25 was by the government while 86% (₹20,298,413 crore) was by private households.
% OF GDP
- The total consumption expenditure in 2024-25 as a ratio to GDP increased to 71.4%
- The government expenditure in 2024-25 is estimated at a decadal low of 10% of India's GDP
- The private/household expenditure in 2024-25 is estimated at a decadal high of 61.4% of India's GDP
% OF TOTAL EXPENDITURE
- 14% of the total expenditure in 2024-25 was government expenditure while 86% was private/household expenditure.
- In comparison to 2014-15, the share of government expenditure in the total expenditure decreased by 1.2% in 2024-25, while that of private/households has increased by 1.2%.
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