Karandikars & Associates

GDP Expenditure Side Current

The expenditure approach of measuring GDP depicts the final use (demand) of the output and comprises (i) Private Final Consumption Expenditure (PFCE) (ii) Government Final Consumption Expenditure (GFCE) (iii) Gross Fixed Capital Formation (GFCF), (iv) Change in Stocks (CIS), and (v) Net Export of Goods & Services
GDP = PFCE + GFCE + GFCF + CIS + Valuables + Exports - Imports

In the National Accounts Statistics (NAS) of India, the production approach GDP is considered firmer estimate; and the NAS presents the discrepancy with the expenditure approach GDP explicitly

Table below captures trend in GDP at Current Prices measured by the expenditure approach

For 2023-24, Private Final Consumption Expenditure (PFCE) was Rs. 181.3 lakh crore (same as Rs. trillion), Government Final Consumption Expenditure (GFCE) was Rs. 31 trillion, Gross Fixed Capital Formation (GFCF) was Rs. 91.7 trillion, Change in Stocks (CIS) was Rs. 4.6 trillion, Change in Valuables was Rs. 4.2 trillion, Exports of Goods and Services were Rs. 64.6 trillion, while Imports of Goods and Services were Rs. 70.9 crore

As highlighted, the production approach GDP is considered firmer estimate; and the NAS presents the discrepancy with the expenditure approach GDP explicitly. In line with tht, for 2023-24, Discrepancies were -Rs. 5.3 trillion

This translated into GDP at Current Prices, measured from expenditure side of Rs. 301.2 cr, (181.3 + 31 + 91.7 + 4.6 + 4.2 + 64.6 -70.9 -5.3) which matches with GDP measured from the production side