TAG: GS 3: ECONOMY
THE CONTEXT: The Indian government has, after an 11-year hiatus, disclosed the findings of the All-India Household Consumption Expenditure Survey conducted between August 2022 and July 2023.
EXPLANATION:
- This survey typically conducted every five years by the National Statistical Office (NSO).
- It is designed to collect information on the consumption spending patterns of households across the country, both urban and rural.
- The data gathered in this exercise reveals the average expenditure on goods (food and non-food) and services.
- It helps generate estimates of household Monthly Per Capita Consumer Expenditure (MPCE) as well as the distribution of households and persons over the MPCE classes.
- It plays a crucial role in assessing key economic indicators like Gross Domestic Product (GDP), Consumer Price Inflation (CPI), and poverty levels.
- The last survey in 2017-18 faced delays in release, attributed to “data quality” issues.
- The current disclosure marks the first comprehensive data release since then, providing insights into consumption patterns.
Average Monthly Per Capita Consumption Expenditure (MPCE) Trends
- Urban and Rural Disparities:
- Urban households witnessed a 33.5% rise in MPCE since 2011-12, reaching ₹3,510.
- Rural India experienced a 40.42% increase, reaching ₹2,008 over the same period.
- Spending Composition Shift:
- Notably, spending on food decreased:
- Rural households: from 52.9% in 2011-12 to 46.4%.
- Urban households: from 42.6% to 39.2%.
- This shift may impact the calculation of retail inflation.
- Notably, spending on food decreased:
- The MPCE figures exclude imputed values of items received through social welfare schemes like PM Garib Kalyan Ann Yojana.
- When these are considered, the average MPCE at 2011-12 prices rises, excluding free education and healthcare sops.
Bottom 5% and Top 5% Population Analysis
- Income Disparities:
- Bottom 5% in rural areas have an average MPCE of ₹1,373, while in urban areas, it is ₹2,001.
- Top 5% in rural and urban areas have significantly higher MPCE, at ₹10,501 and ₹20,824, respectively.
Regional Disparities in MPCE
- Sikkim stands out with the highest MPCE in both rural (₹7,731) and urban (₹12,105) areas.
- Chhattisgarh reports the lowest MPCE, with ₹2,466 for rural households and ₹4,483 for urban households.
Methodology and Data Collection
- The survey involved 2,61,746 households, with 1,55,014 in rural areas, covering all States and Union Territories.
- The Ministry of Statistics and Programme Implementation released a factsheet summarizing the survey, promising a detailed report later.
National Statistical Office (NSO):
- The Ministry of Statistics and Programme Implementation (MoSPI) is a ministry of Government of Indiaconcerned with coverage and quality aspects of statistics released. The surveys conducted by the Ministry are based on scientific sampling methods.
- The Ministry has two wings, one relating to Statistics and the other Programme Implementation. The Statistics Wing called the National Statistical Office (NSO) consists of the Central Statistical Office (CSO), the Computer center and the National Sample Survey Office (NSSO).
- On 23rd May 2019, the government merged the NSSO with the Central Statistics Office (CSO) to form the National Statistical Office (NSO).
Conclusion and Implications
- The disclosed data will be instrumental in revising economic indicators like GDP, CPI, and poverty levels. The shift in spending patterns, particularly the decrease in food spending, has potential implications for inflation calculations. The socio-economic disparities highlighted in income distribution underscore the need for targeted policy interventions in specific regions.