Gross Domestic Product etc - 6

Categories of expenditure 

1.12 The income available to the individuals in the form of labour income or
capital income or to the productive units in the form of retained income is then
spent. This utilisation of the income can take various forms, namely, (a)
household consumption expenditure, (b) government consumption
expenditure, and capital formation comprising fixed capital formation, and
stock accumulation.

Household consumption expenditure

1.13 The household consumption expenditure referred to as private final
consumption expenditure (PFCE) in National Accounts Statistics (NAS),
consists of expenditure by households (including non-profit institutions) on
non-durable consumer goods and services and all durable goods except land
and buildings.

1.14 The durable goods are defined as those whose life time are more than
one year and consist of items such as furniture, radios, televisions,
automobiles, etc. Purchase and construction of residential buildings are not
treated as consumption expenditure of the households but are included in the
gross capital formation. In the case of owner occupied buildings, the imputed
rent is included in the final consumption expenditure. Similarly, the primary
products of sectors like agriculture, forestry, fishing etc., which are produced
for own consumption by the households will form part of consumption
expenditure. Payments for domestic services which one household renders
to another, such as services of maid servants, cooking, child nursing and
gardening are also included under consumption. However, as in the
production measurement, activities such as cooking meals, scrubbing floor
and minding children undertaken by household members fall outside the
production boundary and are, therefore, excluded from consumption
expenditure as well.[From CSO publication]