Decoding consumption: On the Household Consumption Expenditure Survey 

The 2022-23 household spending survey signals shifts in people’s priorities

February 28, 2024 12:20 am | Updated 07:39 am IST

In an uncharacteristic late Saturday release, the Statistics Ministry unveiled the broad findings of the Household Consumption Expenditure Survey done between August 2022 and July 2023. This is significant as it is the first major survey-based data released since 2011-12 that captures ground realities at the household level — especially with the once-a-decade Census, due since 2021, nowhere in sight. Conducted every five years by the National Sample Survey Office (NSSO), the results of the last such consumption survey in 2017-18, along with a similar employment survey, were junked with the government citing “quality issues” with the data — viewed as a euphemism for the unhappy tidings it may have showed. If the 2017-18 Survey was abandoned because it captured the deleterious after-effects of the demonetisation of high-value currency notes in late 2016 on India’s largely informal economy, and the subsequent onset of the Goods and Services Tax, the 2022-23 survey also needs to be interpreted with a dash of salt. For, it may likely magnify the exuberance seen in consumption after two years of pandemic-induced curbs and income losses — what economists call the release of pent-up demand.

To be clear, the Survey suggests some interesting transitions in consumption patterns and the complete findings must be published swiftly to enable deeper analysis. Households’ average monthly per capita consumer expenditure (MPCE) rose 33.5% since 2011-12 in cities to reach ₹3,510, and 40.4% in rural India to ₹2,008. The government has sought to paint this as a signal of rising incomes, narrowing inequality, and a sharp slippage in poverty levels. But this only implies a 3.5% compounded annual growth in rural spends over 11 years, with a 3% growth for urban households — well below the inflation and GDP growth rates in this period. Puzzlingly, even after adding the imputed values of free goods received through a myriad of welfare schemes such as the PM Garib Kalyan Anna Yojana, the average MPCE only rose to ₹2,054 for rural households and ₹3,544 for urban peers. That the proportion of monthly spends on food has slipped below 50% in rural homes (to 46.4%), and under 40% in urban homes, with cereals seeing the sharpest drop, is remarkable, and may ease inflation trends if used to rejig Consumer Price Index weightages. However, it is pertinent to recall that food inflation began spiking last June just ahead of the Survey’s completion, and has remained elevated since. So, proportional spends have likely changed. A clearer picture, devoid of pent-up demand and inflation flip-flop effects, is expected from the fresh Survey that concludes this July. So, any recalibration of poverty, inflation or GDP calculations must wait till those results are compiled, and released as well.

Top News Today

Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in


Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.