Why in the news?

National Sample Survey Office (NSSO) released the results of the household consumption expenditure survey (HCES).

More on the news

• MoSPI decided to conduct two consecutive surveys on household consumption expenditure during 2022-23 and 2023-24, once situation normalized after the Covid-19 pandemic.
• The fieldwork of the second survey on the subject has been undertaken during August 2023 to July 2024 throughout the entire country.

Important Findings of HCES: 2023-24

• Average Monthly Per Capita Expenditure (MPCE):
  • Rural: ₹4,122 (₹4,247 with imputed benefits)
  • Urban: ₹6,996 (₹7,078 with imputed benefits)
• Growth in MPCE: Increased by 9% in rural and 8% in urban areas from 2022-23.
• Urban-Rural Gap: Reduced from 84% (2011-12) to 70% (2023-24), indicating rural consumption growth.
• Increased Spending on Non-Food Items: Non-food items dominate expenditure (53% rural, 60% urban), with the major contribution from conveyance, clothing, etc. 
  • Percentage share of food in average monthly expenditure had fallen. 
• Consumption Inequality: Gini coefficient declined to 0.237 (rural) and 0.284 (urban), reflecting reduced income disparity.
  • Gini Coefficient measures the extent of income inequality among households. It ranges from 0 (perfect equality) to 1 (perfect inequality).
• Inequality among States: MPCE is highest in Sikkim and lowest in Chhattisgarh. 
• Implications for Inflation Measurement: The shift towards non-food spending may lead to changes in the Consumer Price Index (CPI) composition, affecting inflation assessments.

About Household Consumption Survey Expenditure (HCES)

• Aim: To capture detailed data on household consumption and expenditure patterns, essential for analysing living standards and well-being across India. 
• Conducted by: National Sample Survey Office (NSSO) at regular intervals,
  • Initially, It was conducted at one-year duration (starting 1950-51). However, since its 26th round, the survey has been conducted roughly every 5 years. (The 2017-18 Survey was discarded by the government citing 'Data Quality' issues.)
• Key Objectives of HCES
  • Consumption Patterns: Captures data on household consumption of goods and services, reflecting living standards and well-being.
  • Consumer Price Indices: Facilitates the development of weighing diagrams for Consumer Price Indices (CPI), crucial for economic analyses.
  • Economic Indicators: Provides a basis for revising the base year for macroeconomic indicators such as GDP and CPI.