4 min readFeb 26, 2024 07:36 AM IST
First published on: Feb 26, 2024 at 07:04 AM IST
The National Sample Survey Office conducts large-scale surveys on household consumption expenditure in the country, typically once every five years. These surveys not only inform about changes in household consumption expenditure patterns, but they also form the basis of poverty and inequality estimation. They are also used for drawing up the weighting diagram for the compilation of price indices used to measure retail inflation and for deriving other macroeconomic indicators.
The results of the 2017-18 survey were not released by the government on grounds of issues of data quality — its leaked reports had shown a decline in consumption expenditure. This had meant that till now the last survey data available was for 2011-12. It is thus welcome news that the government has released the broad results of the consumption survey carried out in 2022-23.
The latest survey shows that, in rural areas, household consumption expenditure has risen from Rs 1,430 in 2011-12 to Rs 3,773 in 2022-23, and in urban areas from Rs 2,630 to Rs 6,459. At 2011-12 prices, this translates to an increase of 3.1 per cent per year in rural areas, and 2.7 per cent in urban areas. The disaggregated data throws up several interesting trends. As household incomes have continued to grow, expenditure on food has continued to fall. In rural areas, the share of food in the spending basket has declined from 52.9 per cent in 2011-12 to 46.4 per cent in 2022-23, while in urban areas it has fallen from 42.6 per cent to 39.2 per cent. The dip in the case of cereals has been even more dramatic — from 10.7 per cent to 4.9 per cent in rural areas, and from 6.6 per cent to 3.6 per cent in urban areas.
Households are now allocating a greater share for nutritional items such as eggs, fish and meat, milk and fruits, as well as on beverages, refreshments and processed foods. In fact, spending on beverages and processed food is now more than that on cereals and pulses combined. And milk and milk products are now the second highest item in the consumption basket. A greater share of spending is also now being directed towards education, health and conveyance and on consumer durables and services. As household incomes rise and expenditure on essential items falls, discretionary spending will rise further.
With the release of the detailed survey data, it will now be possible to arrive at an understanding of the trends in poverty and inequality in India over the past decade or so — a period marked by considerable changes in the economy. This survey data will also help in updating the consumer price index, which is a valuable input for monetary policy. For instance, the consumer price index currently assigns a weight of 12.35 per cent to cereals in rural areas. But cereals now account for only 4.89 per cent of the household consumption basket. The release of this survey also marks an important step towards filling the data vacuum in the country. The next government should take this forward, initiate the much delayed census exercise and take steps to strengthen the country’s statistical system.
The results of the 2017-18 survey were not released by the government on grounds of issues of data quality — its leaked reports had shown a decline in consumption expenditure. (File Photo) 
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