All India Household Consumption Expenditure Survey: Insights from the 2022-23 Survey

PWOnlyIAS February 26, 2024 06:08 2814 0

Recently, the Union Government released the broad findings of the All India Household Consumption Expenditure Survey carried out between August 2022 and July 2023.

All India Household Consumption Expenditure Survey: Insights from the 2022-23 Survey

Context:

Recently, the Union Government released the broad findings of the All India Household Consumption Expenditure Survey carried out between August 2022 and July 2023.

About All India Household Consumption Expenditure Survey (HCES)

Objective: The Household Consumption Expenditure Survey (HCES) is designed to gauge household spending habits, providing crucial insights into consumption patterns, living standards, and overall well-being.
Agency Responsible: The recently released 2022-23 survey conducted by the National Sample Survey Office (NSSO) sheds light on significant trends and disparities in household spending across rural and urban India.
NSSO has been conducting household consumption expenditure surveys once every five years since 1972-73.
- The results of the last survey, conducted in 2017-18, were withheld over what the government described as “data quality issues”,

Key Findings of Household Consumption Expenditure Survey 2022-23

1. Per Capita Consumption Spending Trends:

India’s per capita monthly consumption expenditure witnessed a notable increase of 33-40% in 2022-23 compared to 2011-12, reflecting an average annual growth of 3.1% for rural areas and 2.7% for urban areas.
The average estimated Monthly Per Capita Consumption Expenditure (MPCE) stood at Rs 3,773 in rural India and Rs 6,459 in urban India for the year 2022-23.

Household Consumption Expenditure Survey

2. Regional Disparities:

Sikkim emerged as the state with the highest MPCE in both rural (Rs 7,731) and urban (Rs 12,105) areas, while Chhattisgarh reported the lowest MPCE with Rs 2,466 in rural and Rs 4,483 in urban areas.
Rural-urban disparity in average MPCE was the highest in Meghalaya, followed by Chhattisgarh.
Examining the economic spectrum, the bottom 5% of the rural population had an average MPCE of Rs 1,373, while the top 5% had a significantly higher average of Rs 10,501. In urban areas, the bottom 5% and top 5% had MPCEs of Rs 2,001 and Rs 20,824, respectively.

State/UT	Rural MPCE (Rs)	Urban MPCE (Rs)
Sikkim	7,731	12,105
Chhattisgarh	2,466	4,483
Meghalaya	—	—
Chandigarh	7,467	12,575
Ladakh	4,035	—
Lakshadweep	5,475	—

MPCE by State and Union Territory

3. Survey Coverage and Items Included:

The survey covered 2.62 lakh households, categorizing the consumption basket into food items, consumables and service items, and durable goods.
A total of 405 items were covered, up from 347 items in the previous survey, providing comprehensive data to derive various macroeconomic indicators.

Household Consumption Expenditure Survey

4. Methodology and Estimates:

Estimates of MPCE were based on Modified Mixed Reference Period (MMRP), capturing expenditure on essential items over specific reference periods.
- MMRP considered expenditure on specific items over the “last 7 days” for certain categories and the “last 365 days” for others.
Adjusting for imputed values of items received free through social welfare programs and other sources, the average estimated MPCE in 2022-23 was Rs 3,860 in rural and Rs 6,521 in urban India.

Household Consumption Expenditure Survey

5. Imputed Values and Adjustments

Considering imputed values of items received free through social welfare programs, the average estimated MPCE in 2022-23 was Rs 3,860 in rural and Rs 6,521 in urban India.

6. Shifting Consumption Patterns

The survey highlights a narrowing gap in per-capita spending between rural and urban India over the last 11 years.
Changes in spending patterns indicate a decline in the proportion of spending on cereals and a rise in spending on milk products, eggs, fish, meat, and processed foods.

7. Income Disparity Insights

While the spending gap between rural and urban areas has narrowed, there remains significant intra-state and inter-state disparity.
The MPCE of the top 5% in urban areas is 941% higher than the bottom 5%, indicating substantial income inequality.

Household Consumption Expenditure Survey

Household Consumption Expenditure Survey 2022-23: Implications and Insights

1. Income Disparity:

While the survey indicates a narrowing gap in per capita spending between rural and urban India, significant disparities persist within and across states.
The data underscores wide income gaps, with the top 5% of households spending significantly more than the bottom 5%, highlighting socioeconomic inequalities.

2. Changing Consumption Patterns:

Shifts in spending patterns reveal a decrease in the proportion of spending on cereals, driven by rising incomes and subsidized foodgrain schemes.
Increased spending on milk, milk products, eggs, fish, and meat reflects evolving dietary preferences, with a notable rise in spending on processed food and dining out.

3. Policy and Industry Implications:

The survey provides critical insights for policymakers to fine-tune social schemes and understand evolving consumer behavior.
The HCES is crucial for policymakers to fine-tune social schemes and understand the impact of policy interventions on healthcare, education, and living standards.
For industries, the survey provides insights into changing consumer behavior, helping them adapt strategies and tap into emerging markets.

Conclusion

Household Consumption Expenditure Survey 2022-23 offers valuable insights into the dynamics of household spending, highlighting both progress and persistent disparities in consumption patterns across India.

By analyzing these findings, policymakers and industries can make informed decisions to address socioeconomic disparities and adapt to evolving consumer preferences, thereby fostering inclusive growth and development.

Also Read: Periodic Labour Force Survey (PLFS) Annual Report 2022-23

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Frequently Asked Questions

It collects data on household spending to understand consumption patterns and well-being.

The government cited "data quality" issues as the reason for not releasing the data.

Urban: 33.5% increase to ₹3,510; Rural: 40.42% increase to ₹2,008.

Rural: 52.9% to 46.4%; Urban: 42.6% to 39.2%.

Free education and healthcare; included non-food items from social welfare programs.

2,61,746 households, with 1,55,014 in rural areas.

Bottom 5%: Rural - ₹1,373, Urban - ₹2,001; Top 5%: Rural - ₹10,501, Urban - ₹20,824.

Highest: Sikkim (Rural - ₹7,731, Urban - ₹12,105); Lowest: Chhattisgarh (Rural - ₹2,466, Urban - ₹4,483).

Yes, a detailed report will be released subsequently.

Based on data collected from households using a modified reference period.

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All India Household Consumption Expenditure Survey: Insights from the 2022-23 Survey

Context:

About All India Household Consumption Expenditure Survey (HCES)

Key Findings of Household Consumption Expenditure Survey 2022-23

1. Per Capita Consumption Spending Trends:

2. Regional Disparities:

3. Survey Coverage and Items Included:

4. Methodology and Estimates:

5. Imputed Values and Adjustments

6. Shifting Consumption Patterns

7. Income Disparity Insights

Household Consumption Expenditure Survey 2022-23: Implications and Insights

1. Income Disparity:

2. Changing Consumption Patterns:

3. Policy and Industry Implications:

Conclusion

Frequently Asked Questions

What is the Household Consumption Expenditure Survey (HCES)?

Why was the data from the 2017-18 Consumer Expenditure Survey withheld?

What was the increase in per capita consumption expenditure from 2011-12 to 2022-23?

How did spending on food change from 2011-12 to 2022-23?

What items were excluded from the average MPCE calculations?

How many households were surveyed in the latest HCES?

What is the MPCE for the bottom 5% and top 5% of rural and urban populations?

Which state had the highest MPCE, and which had the lowest?

Will there be a detailed report on the survey findings?

How are the estimates of MPCE calculated?

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