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Household Consumption Expenditure Survey 2022-23

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February 27, 2024

Why in news?

Recently Ministry of Statistics and Program Implementation has released Household Consumption Expenditure Survey 2022-23.

Household Consumption Expenditure Survey (HCES)

  • About HCES-It is designed to collect information on consumption of goods and services by the households.
  • It also collects some auxiliary information on household characteristics and demographic particulars of the households.
  • Conducted by- National Sample Survey Office under Ministry of Statistics and Program Implementation.
  • Publication- It is supposed to be held every 5 years.
  • 2017-18 survey- It was not released citing data quality issues.
  • Aim- To generate estimates of household Monthly Per Capita Consumption Expenditure (MPCE) and its distribution separately for
  • Rural and urban sectors of the country,
  • States and Union Territories, and
  •  Different socio-economic groups.
  • Summary results- The survey related to MPCE is being released in the form of a factsheet.
  • Application- Information collected in HCES is useful for understanding the
  • Consumption and expenditure pattern,
  • Standard of living and
  • Well-being of the households.
  • It is essential to update Consumer Price Inflation (Retail inflation) basket.
  • Improved policy decisions based on expenditure and consumption behaviour.

What are the key highlights of the report?

  • Coverage- The whole of the Indian Union except a few inaccessible villages in the Andaman and Nicobar Islands.
  • Consumption basket-It has been divided into three broad categories namely,
    • Food items,
    • Consumables and Services items, and
    • Durable goods.
  • Consumption expenditure- It has increased by over 2.5 times from 2011-12 levels in current prices, and the growth is faster in rural India than urban India.
  • Estimates of MCEP- It is based on Modified Mixed Reference Period (MMRP)
  • MMRP is based on household consumer expenditure on edible oil, egg, fish and meat, vegetables, fruits, spices, beverages, refreshments, processed food, pan, tobacco and intoxicants for a reference period of the “last 7 days” and for all other items, recorded for the same reference period as in case of MRP.
  • MRP refers to household consumer expenditure on  (i) clothing and bedding, footwear, education, institutional medical care, and durable goods for a reference period of the “last 365 days” and (ii) expenditure on all other items for a reference period of the “last 30 days”.
  • MPCE- India's per capita monthly consumption expenditure was 33-40% higher in 2022-23 than 2011-12.
  • The average monthly per capita consumption expenditure (MPCE) of both urban and rural households doubled in the 11-year period with both spending lesser on food items.
  • Of this 46% of the expenditure was on food items in rural households and 39% in urban homes in 2022-23.

MPCE is  a measure of the average spending of a person in a month on various goods and services such as collection of data in the field for consumption out of home-grown/home-produced stock and gifts, loans, free collection and goods received in exchange of goods and services etc.,

Key aspect

High/low

State/ UT

Both rural and urban areas

High

Sikkim

Low

Chhattisgarh

Rural- urban difference in average MPCE

High in States

  • Meghalaya (83%)
  • Chattisgarh (82%)

High in UT

Chandigarh

Low in UT

  • Ladakh- In rural areas
  • Lakshadweep- In urban areas
  • Imputed average MPCE data- NSSO provided another set of MPCE by providing the imputed value of a number of items received free by households through various social welfare programmes.
  • Coverage of imputed average- It includes
    • Food items- Rice, wheat, atta, pulses, salt, sugar, edible oil, etc., and
    • Non-food items- Laptop/ PC, tablet, mobile handset, bicycle, motorcycle/ scooty, clothing (school uniform), footwear (school shoes, etc.,).
  • The MPCE of rural and urban households which includes the imputed value of free food and non-food items is higher compared with the MPCE which does not include the free items.
    • In rural households, the bottom 0-5 per cent of the population got the least to spend in terms of imputed value of free items.
  • Non-imputed average of MPCE data- It does not include imputed value of items, the urban non-imputed average is higher than rural households.

It is used to calculate the retail inflation and interest decisions by the Reserve Bank of India.

  • Food expenditure- The rural households’ spending on food has dropped below 50% of their total expenditure for the first time ever.
    • The consumption of high-value items such as eggs, fish, meat, and fruits has increased, especially in rural areas
  • Income disparity- The richest 20% of the population account for nearly 46.2% of the total consumption expenditure.
    • The bottom 20% account for only 8.8% of the total expenditure.
  • Widening gap- There is a wide gap between the rich and the poor in both rural and urban India,
    • The richest 5% spend eight to ten times more than the poorest 5%.
    • The average MPCE of urban households is much higher than that of rural households.
  • Improved rural income-The difference between rural and urban MPCE has narrowed substantially over the years, implying successful government policies for improving rural incomes.

Year

2004-05

2011-12

2022-23

Rural MPCE

90%

84%

71%

References

  1. Indian Express-Household consumption expenditure survey
  2. The Hindu- Poverty level below 5%
  3. MoSPI- Factsheet of Household consumption expenditure survey
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