The Ministry of Statistics and Program Implementation at the weekend released data from the Household Consumption Survey (HCES) conducted in 2022-23. The survey results, which show what Indian households consume and spend on, were the first such data to be released in more than 11 years since the last exercise in 2011-12.
The data are essential not only for updating Consumer Price Inflation (CPI) baskets, but also provide policymakers and practitioners with an assessment of household income and expenditure levels and how and where they spend their money, and measure the effectiveness of policy measures.
HCES data for 2022-23 suggests that income levels of urban and rural households have risen since the last survey, with rural households showing sharper growth in spending, but also suggests that the gap between rich and poor is widening.
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According to the data, the average monthly per capita consumption expenditure (MPCE) of both urban and rural households doubled over the 11-year period, with both spending less on food. The MPCE for rural households (excluding imputed values of items received free through various welfare schemes) has increased to Rs 3,773 in HCES 2022-23 from Rs 1,430 in 2011-12. Similarly, the MPCE for urban households has increased to Rs 6,459 in 2022-23 from Rs 2,630 in the previous round.
Of this, 46% was spent on food by rural households and 39% by urban households in 2022–23.
Gap between rich and poor
The bottom 5% of India’s rural population, assessed by MPCE, has an average MPCE of Rs 1,441, while in urban areas it is Rs 2,087. This translates into a daily average consumption expenditure of Rs 48 in rural areas and Rs 69.5 in urban areas for the bottom 5%.
Methods
The 2022-23 HCES questionnaire has 405 items compared to 347 items in 2011-12. Furthermore, a single questionnaire was used in all NPS household consumption expenditure surveys prior to HCES: 2022-23. However, in HCES: 2022-23, three separate questionnaires covering (i) food, (iii) items of consumables and services and (iii) consumer durables were used.
