Government sector
Also called: State · Topic: National Income Accounting: GDP, GVA and Welfare · NCERT: Class 12, Ch 1 "Introduction (Macroeconomics)"
Meaning
The government sector is the part of the economy run by the State. It makes and enforces laws, delivers justice, collects taxes, builds infrastructure, and runs schools and health services. Sometimes it also produces goods itself. It works towards public goals set by law or the Constitution, such as employment, education, health and defence, and not towards private profit. In national accounts, its spending (G) includes both government consumption and government investment.
Example
In India, the Union and state governments collect GST and income tax, then spend the money on highways, government schools and hospitals. Government consumption spending (GFCE) was ₹17.08 lakh crore in 2024-25, or about 9.1% of GDP (Provisional Estimates, constant 2011-12 prices).