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| Household Consumption Expenditure Survey ; How is Indian Economy? |
The Ministry of Statistics and Programme Implementation has recently released a fact sheet on household consumption expenditure survey. This article shares most important insights from the report published by the Ministry.
Introduction on household consumption expenditure survey:
Firstly it important to know about the fact sheet which was released by the Ministry of Statistics and Programme Implementation [MOSPI].This survey helps us to understand the consumption and expenditure pattern and the standard of living of the people in both rural and urban area. It also provides the data of Monthly Per Capita Expenditure [MPCE].Usually the National Sample Survey Office [NSSO] conducts the survey on household consumption expenditure [HCE] and also about employment survey for every five years.But due some issues no survey report was released after 2011-12. So after a long gap of 10 years now the data has been released.Using these data collected the CPI and GDP components are found.
For the purpose of ensuring a proper representation of households,the households of different economic category were divided into three groups depending on:
- land possessed in rural area and
- possession of car in urban areas
- food items,
- Consumables and services items and
- Durable goods.
What was found from Household Consumption Expenditure Survey [HCES]?:
The average MPCE was Rs.3,773 in rural and Rs. 6,459 in urban. The difference between both the rural and urban MPCE has declined to 71.2% in 2022-23 which was at 83.9% in 2011-12 and 88.2% in 2009-10 .
The share of food items and cereals in average MPCE have declined significantly. It is usually considered that if the expenses on food decline then people tend to spend on other goods like electronics, vehicles, etc.
The MPCE has grown at around 2.5 times compared to 2011-12. However most of the consumption expenditure was due to inflation. So actually the expenditure has increased by 1.3 times in urban areas and 1.4 times in rural areas.In comparison with the growth in per-Capita, the growth in household consumption was slower. However we cannot decide anything about the slow down of household consumption as another data is yet to come.
Further more the survey report states that,out of total MPCE 46.38% was for food items in rural India and 39.17% in the urban India. Also the expenditure on non-food items were 53.62% and 60.83% in rural and urban areas respectively. When it said that the demand on food items declined, it is important to know that the demand for beverages and processed food have increased significantly.
Some alarming points:-
It alarming to know that the consumption of tobacco products and other intoxicants have increased from 3.21% to 3.79% of MPCE in rural India and 1.61% to 2.43% of MPCE in urban India.
Similarly the expenditure on education has declined 3.49% to 3.30% of MPCE in rural India and 6.90% to 5.78% of MPCE in urban India.
Spending for services and durables:
The spending on durables also increased significantly both in rural and urban India. This might be because of increse in the level of income and the growth of middle class population in the country.
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