Household Consumption Expenditure Survey 2022-23

Why in news?

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

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)

• 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.,

• 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.

References

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