Government and NPISHs
Final Consumption
Present practice in India
Session III: 26.4.2011
P.Bhanumati and Anindita Sinharay
Ministry of Statistics & Programme Implementation,
India
Schedule of Presentation



Statistical System in India
Government Final Consumption Expenditure
Final Consumption Expenditure of NPISH
Statistical System in India
Institutional Arrangement for
Statistics in INDIA






India has a federal structure of Governance.
There are 35 States/UTs.
States are further divided in the Districts.
In all there are 600 Districts.
Responsibilities are divided for administration between
the Central Government and the State Governments.
Statistics comes under the Concurrent List, where
both the Union and State Governments can operate.
Statistical System at the Centre


Ministry of Statistics and Programme Implementation
(MOSPI) is the nodal agency for a planned
development of the statistical system in the country
and for bringing about coordination in statistical
activities among statistical agencies in the Government
of India and the States.
The collection of statistics for different subject-specific
areas, like agriculture, labour, commerce, industry,
health and education etc. rests with the corresponding
administrative ministries.
Contd…
Statistical System in the States




The Statistical System in the States is similar to that at the Centre.
At the apex level is the Directorate of Economics and Statistics
(DES), which is responsible for the coordination of statistical
activities in the State.
Departments of the State Governments, such as, agriculture or
health, have large statistical divisions for the work of departmental
statistics.
The Directorate of Economics and Statistics in the States keep
liaison with the CSO for purpose of coordination at all-India level.
Role of State (DESs) in Compilation of
Regional Accounts



The estimates are prepared by the State Income
Unit of the respective State Directorates of
Economics and Statistics (DESs).
At present all the states, regularly prepare estimates
of total and per capita income both at current and
constant prices.
The Central Statistics Office assists the States in
the preparation of these estimates by rendering
advice on conceptual and methodological problems.
Final Consumption Expenditure by
Government
GDP by Expenditure Approach
GDP at purchasers prices by the expenditure approach
= Final consumption expenditure (by households, government,
non-profit institutions serving households)
+ Gross capital formation
(gross fixed capital formation +changes in inventories+
acquisitions less disposals of valuables)
+ Exports of goods and services, f.o.b.
- Imports of goods and services, f.o.b.
Who can incur Final Consumption
Expenditure?

Institutional units are;
1. General Government
2. Corporations
3. Households
4. NPISHs

Only Government, Households and NPISHs can incur final
consumption expenditure.

All consumption expenditure of
intermediate consumption expenditure.
Corporations
is
General Government

Producers of government services:
- administrative departments
- departments of government
- local authorities
Final Consumption Expenditure by
Government
Includes
 Expenditure on individual services (e.g. education and health) and
collective services (e.g. general administration and defence) produced
by government itself

Expenditure on consumption goods and services purchased by
government from market producers and supplied directly to households
without further processing, i.e. as social benefits in kind.

The value of the consumption of output is equal to the value of output
minus any sales receipts. These include receipts from fees and charges
that are not economically significant and, to a minor extent, receipts
from sales of market output
Final Consumption Expenditure
by Government

GFCE
= gross output of administrative departments
= total current expenditure of the administrative departments for
producing government services
= Intermediate consumption + Compensation of employees +
Consumption of fixed capital

The SNA recommends that government consumption be
classified by purpose according to the Classification of the
Functions of Government (COFOG).
Sources of data and analysis



Budget documents of government
 Annual Financial Statements giving the receipts and
disbursements for every financial year are laid before the
Parliament/State Legislature
Each item classified based on purpose classification (in the line
of COFOG) and economic classification
Summing over all items to get purpose wise and economic
classification wise estimates
Quality and Limitations of
database



Variation in the presentation of details under
various heads from state to state
Lack of details of expenditure under “plan
schemes”; proxy indicators for the economic
classification
Complete annual accounts not available for
all local bodies/ autonomous institutions.
Final Consumption Expenditure of
NPISH
Final consumption of NPISHs



Presently no separate estimate is prepared
for final consumption by NPISHs in India.
The estimate of final consumption by
household sector and NPISHs together is
prepared and presented in Indian national
accounts statistics.
Estimates are prepared using commodity flow
approach.
Final consumption of NPISHs



Efforts MadeSurvey for identifying NPISHs and preparing
their accounts: just completed;
Accounts formed using data of 4 lakh out of
the 31 lakh Non-Profit Institutions Serving
Households.
More surveys required for incorporation into
National Accounts.