Arrange the following demand-side components of GDP in ascending order based on their share in India's economy:

1. Government Final Consumption Expenditure (GFCE)
2. Gross Fixed Capital Formation (GFCF)
3. Private Final Consumption Expenditure (PFCE)

Select the correct answer using the code given below:
(a). GFCE

Question

Arrange the following demand-side components of GDP in ascending order based on their share in India's economy:

1. Government Final Consumption Expenditure (GFCE)
2. Gross Fixed Capital Formation (GFCF)
3. Private Final Consumption Expenditure (PFCE)

Select the correct answer using the code given below:
(a). GFCE < GFCF < PFCE
(b). PFCE < GFCF < GFCE
(c). GFCF < GFCE < PFCE
(d).GFCE < PFCE < GFCF

ONLiNE UPSC · Accepted Answer

India's GDP is primarily driven by Private Final Consumption Expenditure (PFCE), followed by Gross Fixed Capital Formation (GFCF), and finally Government Final Consumption Expenditure (GFCE). Their approximate shares in GDP are:
Government Final Consumption Expenditure (GFCE) &asymp; 10.4%: This represents government spending on goods and services, including salaries, defense, and public welfare programs.
Gross Fixed Capital Formation (GFCF) &asymp; 30.83%: This represents investment in infrastructure, machinery, and long-term assets essential for economic growth.
Private Final Consumption Expenditure (PFCE) &asymp; 62.0%: This is the largest component of GDP, as household consumption plays a dominant role in India's economy.
Thus, the correct ascending order based on their share in India's economy is:
GFCE < GFCF < PFCE

National Income Accounting

Components of GDP

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M Question 1	⏱ 0
Arrange the following demand-side components of GDP in ascending order based on their share in India's economy: 1. Government Final Consumption Expenditure (GFCE) 2. Gross Fixed Capital Formation (GFCF) 3. Private Final Consumption Expenditure (PFCE) Select the correct answer using the code given below: (a). GFCE < GFCF < PFCE (b). PFCE < GFCF < GFCE (c). GFCF < GFCE < PFCE (d).GFCE < PFCE < GFCF