Explanation:

 Private final consumption expenditure (PFCE) includes final consumption expenditure of (a) households and (b) non-profit institutions serving households (NPISH) like temples, gurdwaras. The final consumption expenditure of households relates to outlays on new durable as well as non-durable goods (except land) and on services. This consumption expenditure also includes the imputed gross rent of owner-occupied dwellings, consumption of Own-account production evaluated at producers' prices and payments in kind of wages and salaries valued at cost, e.g., provision for food, shelter and clothing to the employees. The final consumption expenditure of non-profit institutions serving households includes the value of goods and services produced for own use on current account i.e., the value of gross output reduced by the sum of the value of their commodity and non-commodity sales. This would include transfers in kind of non-durable goods and services from Government Administration, industries and rest of the world. The final consumption expenditure of households and non-profit institutions serving households are estimated together and are not available separately. However, expenditures on second hand goods are not included.

Estimates of PFCE are obtained by following the commodity flow method. The commodity - flow method of estimating PFCE on a given item group consists of subtracting intermediate consumption, Government final consumption, exports, changes in stocks and investment from net availability given by domestic production plus imports. The quantity of final consumption obtained from commodity balances is generally evaluated at market prices

Consumption expenditure has been the major driver of GDP growth in India. Between 2012-13 and 2015-16, it accounted for nearly sixty per cent of the total GDP growth. This increased to over 95 per cent in 2016-17, due to higher growth of both Private Final Consumption Expenditure (PFCE) and Government Final Consumption Expenditure (GFCE).PFCE has been the single most important driver of GDP growth from 2011-12. In 2016-17, it contributed nearly two-thirds to GDP growth.