Expenditure method

 Expenditure Method 

This method is also called expenditure method.  According to this method total income is either spent on consumption or on saving. 

 Therefore, national income is the sum of total consumption and total savings.  In order to calculate the income by this method, it is necessary to have the data related to the income of the consumers and their savings.  

☆Current price☆

Since such accurate data is not easily available.  Therefore this method is less commonly used.

☆constant price☆

In India, national income is calculated on the basis of data obtained from production method and income method.  National Income Data is released by the Central Statistical Office (CSO) at Current Prevailing Prices and Constant Base Year Prices.  

☆private income ☆

The base year 2004-05 has now been changed to 2011-12 for estimating the GDP and national income data at constant prices.