PRIVATE FINAL CONSUMPTION EXPENDITURE ON FOOD ITEMS IN PRE AND POST REFORM PERIOD
Journal Title: International Journal of Physical and Social Sciences (IJPSS) - Year 2012, Vol 2, Issue 9
Abstract
The Government of India introduced economic reforms in various sectors of the economy in July, 1991. The economic reforms were expected to influence the national income and the standard of living of the people. There by the consumption expenditure was expected to change after the reform. The share of expenditure on food items in total aggregate consumption expenditure had declined from 53.7 per cent in 1970-71 to 48.4 per cent at the end of the pre reform period. In the post reform period also, the food expenditure had declined from 49.9 per cent in 1991-92 to 35.4 per cent in 2004-2005. Indian households had prepared to spend this extra money on non food items namely gross rent, fuel and power and transport and communication. At the end of the pre reform period, the expenditure on gross rent, fuel and power was Rs.32619 crore. It was the major expenditure share in the pre reform period. But in the post reform period, the expenditure on transport and communication dominated in the expenditure share of non food items. The percentage contribution of it was 11.5 per cent in 1991-1992 which increased to 18.2 per cent in 2004-2005. It indicates the desireness of consumers towards fast movement of communication era (National Accounts Statistics, 1975, 2005). The above comparative discussion on aggregate national income and aggregate consumption expenditure between pre and post economic reform period indicates that there was significant difference in them. In this backdrop, an attempt was made to identify the factors determining consumption expenditure in the pre and post reform period. The discriminant analysis shows that the major factors that differentiated consumption expenditure between pre and post reform period were Lagged Net National Product, Net National Product and Lagged Private Final Consumption Expenditure.
Authors and Affiliations
Dr. S. Gandhimathi, DR. P. Ambigadevi, K. Thirubhuvana sundari, M. Phil. (Economics)
Keywords
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