Why is it in the news?

• The National Sample Survey Office (NSSO) released the key findings of the Household Consumption Expenditure Survey (HCES) 2022-23.

About the Survey

• The NSSO, under the Ministry of Statistics and Programme Implementation, conducts household surveys on consumption and consumer expenditure at regular intervals, typically with rounds lasting one year.
• Since 1972, the NSSO has been conducting the Consumer Expenditure Survey to gather data on household consumption patterns.
• The survey is designed to collect comprehensive information on the consumption of goods and services by households across the country.
• One of the primary objectives of the survey is to generate estimates of the Monthly Per Capita Consumption Expenditure (MPCE). This estimation is done separately for rural and urban sectors, as well as for different states, union territories, and socio-economic groups.
• The survey provides insights into consumption patterns across rural and urban areas, enabling policymakers to understand variations in spending habits based on geographical and demographic factors.

Methodology Used

 In the current survey, three questionnaires were employed, addressing distinct categories:

• Food items, encompassing staples and dietary preferences.
• Consumables and services items, likely including clothing, healthcare, education, and utilities.
• Durable goods used, which likely covered appliances, electronics, furniture, and vehicles. Additionally, the survey included a separate provision to record the consumption quantity of items received via social welfare programs, aiming to assess their impact on household consumption patterns.

Top of Form

Major Findings

Rise in Income:

• Both urban and rural households experienced an increase in income levels since the last survey.
• Rural households exhibited a sharper growth in spending compared to urban households.

Increase in MPCE:

• The average Monthly Per Capita Consumption Expenditure (MPCE) of both urban and rural households doubled over the 11-year period.
• Despite the rise in MPCE, both urban and rural households spent less on food items.
• In 2022-23, 46% of total expenditure was spent on food items in rural households, while 39% was spent in urban households.

Spending Patterns:

• Household spending increased 2.6 times in rural areas and 2.5 times in urban areas since the last survey in 2011-12.
• The gap between urban and rural household consumption narrowed, with households spending more on non-food items.

Inequality:

• The top 5% of India’s rural population had 7 times the MPCE of the bottom 5% rural population.
• Similarly, the top 5% of India’s urban population had 10 times the MPCE of the bottom 5% urban population.

State-wise Variation:

• MPCE was highest in Sikkim for both rural (₹7,731) and urban areas (₹12,105).
• Chhattisgarh had the lowest MPCE, with ₹2,466 for rural households and ₹4,483 for urban households.

Inferences from the survey

• The gap between rural and urban Monthly Per Capita Consumption Expenditure (MPCE) has significantly narrowed over time, indicating successful government policies aimed at improving rural incomes.
• However, disparities persist, with a widening gap observed at higher income levels, signalling increased inequality.
• Notably, the poorest rural households now spend closer to their urban counterparts, suggesting some effectiveness of government initiatives targeting rural income enhancement.