Changing Patterns of Consumption - Understanding PFCE
"Consumption is considered to be the fundamental determinant of welfare for any economy. It reflects several important characteristics of an economy including affordability, inequality and more. Consumption behaviour is one of the true measures of a society economic, political and social conditions at a given point of time or over time capturing various interconnected issues. Though research related to consumption has gained momentum worldwide in the last three to four decades, in India it is still at a nascent stage. Most of the consumption related research in India is still geared towards understanding inequality and poverty instead of looking at its implications on economy and decision making in businesses. Â One of the shortcomings for restricted research on consumption is certainly data paucity. However, it would be essential to define consumption before we enter into data related issues. Consumption is the largest component of demand generated within an economyâ€”which can happen through various agents. Two broad components are private consumption and government consumption. In this article, we limit our discussion to private consumption only. Private consumption is a true reflection of economic condition and demand generation in an
Consumption is one of the key indicators of the economyâ€™s performance. Since India has been experiencing relatively higher growth and resultant change in household income distribution, consumption pattern too has altered over the last decade or so.