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Journalism of Courage
THE DIFFERENCE in average monthly per capita consumption expenditure (MPCE) between rural and urban households has narrowed to 71.2 per cent in 2022-23 compared with 83.9 per cent in 2011-12, according to the latest Household Consumption Expenditure Survey (HCES) 2022-23 released Saturday by the Ministry of Statistics and Programme Implementation (MoSPI).
This suggests rural consumption spending has risen more than urban consumption spending during the 11 year period.The survey report does reveal that rural average monthly consumption spending per person increased to Rs 3,773 per month in 2022-23 from Rs 1,430 per person in 2011-12, a jump of 164 per cent. This is higher than the 146 per cent increase in urban average monthly consumption expenditure per person to Rs 6,459 in 2022-23 compared with Rs 2,630 per person in 2011-12.
While the Household Consumption Expenditure surveys are held in a gap of five years, the government had not released the survey results of its 75th round for July 2017-June 2018 stating there was a significant variation in the levels in consumption pattern as well as in the direction of change. The survey that was leaked had shown a decline in consumption expenditure.
The HCES factsheet said that the bottom 5 per cent of rural population has an average MPCE of Rs 1,373, while it is Rs 2,001 for the bottom 5 per cent of urban population. The top 5 per cent of the rural and urban population has an average MPCE of Rs 10,501 and Rs 20,824, respectively. In other words, while the MPCE of top 5 per cent of rural population is 7.65 times more than its bottom 5 per cent, the MPCE of top 5 per cent of urban population has an MPCE of over 10 times its bottom 5 per cent.
In 2022-23, the share of expenditure on food in rural India was 46 per cent (Rs 1,750), and in urban India was 39 per cent (Rs 2,530). In 2011-12, it was 52.90 per cent in rural India and 42.62 per cent in urban India. This has implications for consumer price index based inflation.
Consumption expenditure on non-food items in both rural india (54 per cent) and urban India (61 per cent) was mainly driven by a rise in share of spending on conveyance, consumer services, durable goods in 2022-23 as against 2011-12. The share of expenditure on cereals, pulses and vegetables moderated during the same period.
By adding the imputed cost of food grains distributed by the government and other free items given under government schemes, the survey report said that the average monthly consumption expenditure stood at Rs 3,860 in rural areas and Rs 6,521 in urban areas. This implies such consumption expenditure is only higher by Rs 87 in rural areas and by Rs 62 in urban areas when compared against expenditure without the value of free items.
With the imputed value of free items, the bottom 5 per cent of India’s rural population spends about Rs 1,441 which is only marginally higher than the amount of Rs 1,373 spent without inclusion of the free items. For the urban areas, the consumption expenditure for the bottom 5 per cent stood at Rs 2,001 without the imputed value of free items and at Rs 2,087 after inclusion of the imputed value of free items.
The Household Consumption Expenditure Survey (HCES) collects information on consumption of goods and services by the households. The new consumption expenditure survey results have come after a long gap of more than 10 years since the government had scrapped the 2017-18 survey after leaked results had shown a decline in consumption.
It was decided to conduct two consecutive surveys during 2020-21 and 2021-22 to facilitate an appropriate period for the revision of the ‘base year’ for macroeconomic indicators, MoSPI said in its report. However, due to the emergence of Covid-19 pandemic, the survey of 2020-21 could not be started. The first of the two consecutive surveys began in August 2022 and continued till July 2023. The Ministry said it has only released a factsheet for 2022-23 and will release a detailed report soon
