CBSE Class 12-commerce Answered

Government final consumption expenditure is defined in national accounts as “expenditure incurred by the general government sector on goods or services that are used for the direct satisfaction of individual needs or wants (individual consumption goods and services) or expenditure on the collective needs of members of the community.  The public sector and the general government are not the same. The public sector contains both market and non-market producers, whereas the general government contains non-market producers only. Examples of public sector market producers are corporations (financial and non-financial institutions) controlled by the government and non-profit institutions (NPI‘s) controlled by the government. The class of non-market producing units that are not controlled by the government is allocated to the NPISH institutional sector. The national expenditure is the sum of expenditure of all spending of institutional sectors such as government, households, non-profit institutions serving households and enterprises. Hence the final expenditure of non-financial corporations are not included in the estimation of national income accounting.