Key Insights: All India Household Consumption and Expenditure Survey

  • The government released the main findings of the All India Household Consumption Expenditure Survey, which was conducted between August 2022 and July 2023.

Why are we discussing this?

  • This study, which is typically completed every five years, was long delayed, with the most recent publication dating back to 2017-18.

About the All India Household Consumption Expenditure Survey (CES)

  • The CES is a quinquennial (every five years) survey performed by the National Statistical Office.
  • It is intended to collect data on the consumption and spending habits of households throughout the country, both urban and rural.
  • The information acquired throughout this exercise reflects the average expenditure on items (food and non-food) and services.
  • It contributes to estimates of household Monthly Per Capita Consumer Expenditure (MPCE), as well as the distribution of households and individuals across MPCE classes. 

Key Findings

[1] Rise in Monthly Per Capita Consumption Expenditure (MPCE):

  • Urban: Witnessed a 33.5% increase to ₹3,510.
  • Rural: Marked a 40.42% surge to ₹2,008 since 2011-12.

[2] Shift in Spending Patterns:

  • Food expenditures have decreased from 52.9% to 46.4% in rural families and 42.6% to 39.2% in urban households between 2011-12.
  • Implications: Food price weightage reduction may have an impact on retail inflation calculations.

[3] Inclusion of Social Welfare Benefits:

  • Separate calculation for commodities received under initiatives such as the PM Garib Kalyan Ann Yojana.
  • Computers, mobile phones, bicycles, and apparel were among the items available. 

[4] Adjusted MPCE:

  • Rural: ₹2,054;
  • Urban: ₹3,544 (excluding free education and healthcare sops).

[5] Socio-Economic Disparities:

  • Bottom 5%: Rural – ₹1,373; Urban – ₹2,001.
  • Top 5%: Rural – ₹10,501; Urban – ₹20,824.

[6] State-wise Analysis

  • Sikkim: Highest MPCE – Rural: ₹7,731; Urban: ₹12,105.
  • Chhattisgarh: Lowest MPCE – Rural: ₹2,466; Urban: ₹4,483.

Major Implications

[1] Broad-Based Growth

  • Rural-metropolitan Dynamics: B.V.R. Subrahmanyam, CEO of Niti Aayog, emphasises that India’s growth story is “broad-based,” with rural incomes and expenditures outperforming metropolitan levels.
  • The urban-rural consumption gap has shrunk from 91% in 2004-05 to 71% in 2022-23, demonstrating decreasing inequality.

[2] Shifts in Consumption Patterns

  • Food Expenditure: For the first time, rural households’ food spending fell below 50% of their entire expenditure. Lower spending on basics such as pulses and grains is offset by higher spending on consumer durables and services.
  • Income Growth: Increased spending on products like televisions, refrigerators, and mobile phones indicates higher earnings and changing lifestyles. 

[3] Changing Poverty Metrics

  • Poverty Estimates: Mr. Subrahmanyam predicts that poverty levels will be less than 5% based on MPCE norms. Informal estimates show that poverty is decreasing, with destitution practically eliminated as a result of numerous welfare programmes.
  • Inclusive Growth: Government efforts like Ayushman Bharat and free education have helped to pull millions out of poverty, demonstrating a multifaceted approach to poverty alleviation. 

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