Journal of Indian School of Political Economy

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Private Final Consumption Expenditure of Households in India:Estimates, Issues and Challenges


Affiliations
1 NIPFP, New Delhi, India
     

   Subscribe/Renew Journal


We estimate Private Final Consumption Expenditure (PFCE) of households in India using survey data from CMIE Consumer Pyramids (CP). The analysis is aimed at gaining comparability with existing sources of household expenditures and understanding the component of PFCE at the state level. Findings show that estimates from the CP data corroborate to the state wise distribution of food and Non-food expenditures as shown by the NSS Consumption Expenditure survey. The notable difference are in some of the Non-food categories, where the CP data for 2016-17 shows a much lower percentage for appliances, rent and health as compared to the NSS estimates. At the aggregate, the share of rural regions is much higher than of urban regions, with four major states (Bihar, Maharashtra, Uttar Pradesh and West Bengal) accounting for over 42% of PFCE from rural regions, and seven states (Gujarat, Karnataka, Kerala, Maharashtra, Tamil Nadu, Uttar Pradesh and West Bengal) accounting for over65% of PFCE from urban regions.We argue that the allocation method that uses the NSS item wise expenditure shares rests on strong assumptions and may lead to discrepancies in state level PFCE. Given data challenges from the expenditure side of GDP and limitations of household surveys, most of these aggregates are inadequate for drawing any conclusive inferences about PFCE and its composition.

Keywords

Consumption Expenditure, National Accounts Statistics, GDP, GSDP, India.
User
Subscription Login to verify subscription
Notifications
Font Size

  • CSO, 2015; Report of the Adhikari Committee on Private FinalConsumption Expenditure, Central Statistics Office, Ministry of Statistics and Programme Implementation, Government of India.

  • NSS FOD, 2015; Field experiences of 68th round of NSS. FOD Divisional Paper, National Seminar on Results of NSSO Surveys, National Sample Survey Office, Ministry of Statistics and Programme Implementation, Government of India, (July).

  • Joice, John, 2007; A comparative study on private consumption expenditure estimates in India, Reserve Bank of India Occasional Papers, Vol. 28, No. 1, Summer.

  • Kar, Aloke, T. Baskaran and Ajay K. Gupta A proposed method of compiling private final consumption expenditure at state level.

  • Kulshrestha, A.C. and Aloke Kar, 2005; Consumer expenditure from national accounts and national sample survey, in A. Deaton and V. Kozel (Eds) The Great Indian Poverty Debate, Princeton University Press, Princeton, NJ.

  • Minhas, B.S, L.R. Jain, S.M. Kansal, and M.R. Saluja, 1987; On the choice of appropriate consumer price indices and data sets for estimating the incidence of poverty in India, The Indian Economic Review, Vol. 22, No. 1.

  • Mukherjee, M. and G.S. Chatterjee, 2005; On the validity of NSS estimates of consumption expenditure, in A. Deaton and V. Kozel (Eds) The Great Indian Poverty Debate, Princeton University Press, Princeton, NJ

  • NSS Expert Group, 2003; Suitability of different reference periods for measuring household consumption: Results of a pilot survey, Economic and Political Weekly, Vol. 38, Issue No. 04/25(January).

  • Pathak, K.N. and J.S. Tomar, 2015; Respondent, a key factor in national-level surveys: An analysis. Economic and Political Weekly, Vol. 50, No. 40(October).

  • Rajeswari, T. and Reena Singh, 2017; Estimation of state level private final consumption expenditure, The Journal of Income and Wealth, Vol. 39, No. 2, July-December.


Abstract Views: 288

PDF Views: 0




  • Private Final Consumption Expenditure of Households in India:Estimates, Issues and Challenges

Abstract Views: 288  |  PDF Views: 0

Authors

Amey Sapre
NIPFP, New Delhi, India
Pramod Sinha
NIPFP, New Delhi, India

Abstract


We estimate Private Final Consumption Expenditure (PFCE) of households in India using survey data from CMIE Consumer Pyramids (CP). The analysis is aimed at gaining comparability with existing sources of household expenditures and understanding the component of PFCE at the state level. Findings show that estimates from the CP data corroborate to the state wise distribution of food and Non-food expenditures as shown by the NSS Consumption Expenditure survey. The notable difference are in some of the Non-food categories, where the CP data for 2016-17 shows a much lower percentage for appliances, rent and health as compared to the NSS estimates. At the aggregate, the share of rural regions is much higher than of urban regions, with four major states (Bihar, Maharashtra, Uttar Pradesh and West Bengal) accounting for over 42% of PFCE from rural regions, and seven states (Gujarat, Karnataka, Kerala, Maharashtra, Tamil Nadu, Uttar Pradesh and West Bengal) accounting for over65% of PFCE from urban regions.We argue that the allocation method that uses the NSS item wise expenditure shares rests on strong assumptions and may lead to discrepancies in state level PFCE. Given data challenges from the expenditure side of GDP and limitations of household surveys, most of these aggregates are inadequate for drawing any conclusive inferences about PFCE and its composition.

Keywords


Consumption Expenditure, National Accounts Statistics, GDP, GSDP, India.

References