GDP data: Per capita income and consumption expenditure fall to 2018-19 levels

Indian residents cut back in their consumption expenditure sharply as their income fell, jobs were lost and sentiments dented by the uncertainties brought on by the Covid-19 pandemic during 2020-21. The shopping frenzy during the festival and wedding season was not enough to make up for the loss on spending in the first half of the fiscal year, national accounts data released on May 31 show.

Restrictions placed on mobility, the opening of shopping complexes and delivery of non-essential goods by e-commerce companies would also have contributed to the fall in spending during the year.

Provisional estimates of gross domestic product (GDP) show that the per capita income measured in current prices had contracted 4% from a year ago. In response, consumer spending fell more sharply, by 7%. The national income at current prices had contracted 3%. The country’s population is estimated to have risen by 14 million between 2019-20 and 2020-21.

The national accounts data show that the per capita income at current prices, also known as per capita net national income (NNI), for 2020-21 at Rs 1,28,829 was just a shade above the levels estimated for 2018-19. The per capita NNI for 2018-19 was estimated at Rs 1,25,883.

The per capita consumption expenditure, or per capita private final consumption expenditure (PFCE), for 2020-21 was estimated at Rs 85,348, again just a little more than the spending in 2018-19 when it was Rs 84,567, estimated at current prices.

The fall in per capita income and per capita consumption expenditure spending is deeper if when measured at constant 2011-12 prices.
The private final consumption expenditure is a measure of consumer spending on a variety of goods and services. It measures spending by purpose and durability. Spending break-up by purpose refers to expenditure on food and beverages, clothing and footwear, housing and electricity, recreation, education transport and health. Spending by durability refers to expenditure on durable goods, semi-durable goods, non-durable goods and services.