Household Consumption Expenditure Survey: 2023-24

Household Consumption Expenditure Survey: 2023-24 

(இதன் தமிழ் வடிவத்திற்கு இங்கே சொடுக்கவும்)

Introduction

• The Ministry of Statistics and Programme Implementation (MoSPI) conducted two consecutive surveys on Household Consumption Expenditure (HCES) for the years 2022-23 and 2023-24.
• The primary purpose of these surveys was to analyze and assess the changes in household consumption patterns following the normalization post-COVID-19.
• The survey was carried out by the National Sample Survey Office (NSSO), which operates under the Ministry of Statistics and Programme Implementation (MoSPI).

Survey Periods:

• HCES 2022-23: Conducted from August 2022 to July 2023, with summary results released in February 2024 and detailed reports in June 2024.
• HCES 2023-24: Conducted from August 2023 to July 2024 across the entire country, with the summary results.

Objective of HCES:

• Assess trends in economic well-being.
• Update the basket of consumer goods and services for the Consumer Price Index (CPI).
• Measure poverty, inequality, and social exclusion.
• Primary Metric: The Monthly Per Capita Consumption Expenditure (MPCE) is the key indicator derived from the survey, used for economic analysis and policy formulation.

Sample Coverage:

• Total Households Surveyed: 2,61,953 households (1,54,357 in rural areas and 1,07,596 in urban areas) across all states and union territories.

Key Objectives of HCES

• Data Collection on Household Expenditure: Collects information on household consumption, including goods and services.
• Economic Trends Assessment: Provides data on trends in economic well-being and consumption patterns.
• CPI Calculation: Helps in updating the basket of consumer goods and services for CPI.
• Poverty & Inequality Measurement: Assists in measuring poverty, inequality, and social exclusion.

Survey Estimates:

Two sets of estimates for MPCE:

• Without Imputed Values: Excluding items received free through social welfare programs.
• With Imputed Values: Including items received through social welfare programs.
• Survey Importance: The data collected is crucial for analyzing economic trends, updating indices, and shaping policies aimed at improving living standards and reducing inequality.

• Data Collection on Social Welfare:
• A provision was made to collect data on the quantity of consumption of items received free through various social welfare programmes.

Changes in the Methodology

• Increase in Covered Items:
• The number of items covered in the survey has increased from 347 items in previous surveys to 405 items in 2023-24.
• Introduction of distinct Questionnaires:
• The survey used three distinct questionnaires to cover different expenditure categories:
• Food Items
• Consumables and Services Items
• Durable Goods

• This change led to multiple visits for data collection, replacing the single-visit approach used in earlier surveys.

Important Findings of HCES: 2023-24

• Increase in MPCE:
• In nominal prices, the average Monthly Per Capita Consumption Expenditure (MPCE) in 2023-24 has risen by approximately 9% in rural areas and 8% in urban areas compared to 2022-23.

• Decline in Urban-Rural Gap:
• The urban-rural gap in MPCE has reduced significantly.
• It decreased from 84% in 2011-12 to 71% in 2022-23, and further to 70% in 2023-24, indicating a sustained growth in rural consumption.
• Rural households now spend 69.7% of what urban households spend.

• Maximum Increase in MPCE:
• The bottom 5 to 10% of India’s population (ranked by MPCE) has experienced the highest increase in MPCE in 2023-24, both in rural and urban areas.

• Major Contributors to Expenditure:
• Consistent with the trends observed in 2022-23, non-food items continue to be the dominant contributor to the average monthly expenditure of households in 2023-24.
• Food Expenditure Patterns:
• Beverages, refreshments, and processed food remain the leading categories for household expenditure in both rural and urban areas.
• Non-Food Expenditure Trends:
• Major spending on non-food items in both rural and urban households has been on conveyance, clothing, bedding & footwear, miscellaneous goods & entertainment, and durable goods.

• Consumption Inequality:
• Consumption inequality has declined in both rural and urban areas compared to 2022-23.

• The Gini coefficient has improved, dropping to 0.237 in rural areas (from 0.266 in 2022-23) and to 0.284 in urban areas (from 0.314 in 2022-23), indicating reduced inequality in consumption.

Average Monthly Per Capita Consumption Expenditure (MPCE):

• Rural Areas: The average MPCE increased by 9.2%, reaching ₹4,122.
• Urban Areas: The average MPCE increased by 8.3%, reaching ₹6,996.

Trends in Rural Consumption:

• Non-food items accounted for 53% of rural spending.
• The largest share of expenditure was on clothing, bedding, and footwear.

Trends in Urban Consumption:

• Non-food items made up 60% of urban spending.

• The key contributors to non-food expenditure were miscellaneous goods and entertainment, clothing and footwear, and education.
• For food items, beverages and processed food, vegetables, and dairy products contributed to 31.5% of the urban spending growth.

Regional Differences in Consumption:

• The highest rural-urban MPCE differences among states are observed in:
• Meghalaya (104%)
• Jharkhand (83%)
• Chhattisgarh (80%)

Regional Consumption Patterns:

• Western and northern states generally had higher per capita consumption than eastern and central states.
• States with higher-than-average spending include Maharashtra, Punjab, Tamil Nadu, and Kerala.
• States with lower-than-average spending include West Bengal, Bihar, Uttar Pradesh, and Odisha.

State-wise MPCE Variation:

• Sikkim reported the highest MPCE.
• Rural: ₹9,377
• Urban: ₹13,927
• Chhattisgarh recorded the lowest MPCE.

HCES Data Breakdown

• Fieldwork: The survey covered both rural and urban areas across all states and union territories in India.
• Data Collected: Information was collected on a wide range of goods and services that households typically consume, spanning food, non-food items, and expenditures on health and education.

Variation in MPCE Across Different Fractiles

MPCE Distribution by Population Percentiles

• Bottom 5% of Rural Population: Rs. 1,677.
• Top 5% of Rural Population: Rs. 10,137.
• Bottom 5% of Urban Population: Rs. 2,376.
• Top 5% of Urban Population: Rs. 20,310.

Growth in MPCE (2022-23 to 2023-24):

• Rural bottom 5%: 22% increase.
• Urban bottom 5%: 19% increase.

Regional Disparities in MPCE

Highest MPCE:

• Sikkim: Rural Rs. 9,377, Urban Rs. 13,927.
• Chandigarh: Rural Rs. 8,857, Urban Rs. 13,425.

Lowest MPCE:

• Chhattisgarh: Rural Rs. 2,739, Urban Rs. 4,927.
• Dadra and Nagar Haveli, Daman and Diu: Rural Rs. 4,311, Urban Rs. 5,087.

• Rural-Urban MPCE Gap by State: Meghalaya, Jharkhand, and Chhattisgarh show the highest rural-urban consumption gaps.

Household Consumption Behavior

Expenditure on Non-food Items

• Top Non-food Items:
• Rural: Conveyance, clothing, bedding & footwear, entertainment, and durable goods.

• Urban: Durable goods, clothing, entertainment, and rent.
• Food Consumption: Beverages and processed foods continue to dominate food expenditure, followed by milk products and vegetables.

Regional Differences in Consumption Behavior

• Households across all states show a significant preference for non-food items, which dominate both rural and urban consumption patterns.
• Rural India: Rs. 4,247
• Urban India: Rs. 7,078

Changes in MPCE from 2022-23:

• Rural India: 10% increase.
• Urban India: 8% increase.
• Regional MPCE with Imputation: States like Sikkim and Chandigarh show the highest MPCE, while Chhattisgarh and Dadra & Nagar Haveli show the lowest, reflecting variations in regional consumption standards.

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