The dynamics of household consumption

The Household Consumption Expenditure Survey 2022-23 is a testament to India’s commitment to a resilient statistical system embracing both tradition and innovation

Updated - March 06, 2024 07:47 am IST

Published - March 06, 2024 01:29 am IST

Household Consumption Expenditure Survey offers a close look at how households across India incur expenditures on consumable items in a given period. File

Household Consumption Expenditure Survey offers a close look at how households across India incur expenditures on consumable items in a given period. File | Photo Credit: Reuters

The eagerly awaited fact sheet of the Household Consumption Expenditure Survey (HCES) 2022-23 was released recently by the National Sample Survey Office (NSSO) of the Ministry of Statistics and Programme Implementation. The results of the survey are significant as the last results on household consumption expenditure were released in 2011-12.

What the survey does

The HCES offers a close look at how households across India incur expenditures on consumable items in a given period. It captures auxiliary information on household characteristics and demographic details. The information gleaned from the HCES is instrumental in constructing a weighing diagram for Consumer Price Indices, an index that tracks retail inflation. The weights obtained from the HCES represent the relative significance of goods and services, determined by their respective shares in the overall consumption patterns of households.

The HCES has played a pivotal role in India’s growth story since its inception in 1950-51. Beyond merely detailing spending habits, this survey has been a crucial factor in estimating the head count ratio, which is the percentage of the population living below the national poverty line. Moreover, the HCES has been an invaluable resource for research in diverse fields, including economics and sociology, contributing to our understanding of the nation’s socio-economic landscape.

The HCES was initially scheduled to be conducted in 2020-21 but this could not happen due to the COVID-19 pandemic. The survey finally commenced in August 2022 and went on until July 2023, symbolising resilience and adaptability in the face of adversity. Another phase of HCES, ongoing in 2023-24, started after the completion of the first phase. The two-phase approach not only underscores the perseverance displayed in navigating the challenges in the first phase but also emphasises the commitment to capturing a comprehensive and evolving snapshot of India’s household consumption patterns.

Editorial | Decoding consumption: On the Household Consumption Expenditure Survey 

A significant stride in HCES 2022-23 was the positive shift to the modern and efficient computer-assisted personal interview method from the traditional paper-aided personal interview method. Data this time were entered using tablets. This shift expedited data collection and processing, introducing a more streamlined scrutiny mechanism across divisions of the NSSO.

Engaging a significant sample size of 2,61,746 households, strategically selected through statistically sound sampling design, the survey was designed to align with the consumption patterns of ‘New India’. The questionnaire was enriched with contemporary items (such as paneer, LED bulbs, headphones, and details on online purchases) and the removal of obsolete items. To ensure a more efficient and accurate data collection process, the survey employed a strategic approach. The questionnaire was divided into three parts, and households were surveyed in three separate monthly visits within a quarter. This not only expedited the canvassing process but also resulted in an improvement in response quality, ensuring comprehensive coverage of the consumption expenditure on all 407 items.

This holistic approach to data collection, combining both conventional and contemporary practices, highlights the commitment of the HCES to accurately capture the diverse consumption patterns of households. The robust sampling design, coupled with the incorporation of new items and innovative survey techniques, reflects a dedication to staying attuned to the dynamics of a rapidly changing official statistics domain. The fact sheet provides key estimates within six months of the end of the survey, with low relative standard errors for monthly per capita expenditure at both national and State levels.

While embracing modernity, the survey also retained certain traditional practices. The age-old method of imputing the value of home-grown or produced stock, gifts, loans, and exchanges persisted. Additionally, the NSSO took a pioneering step by imputing the value of items received free of cost through various social welfare programmes for the first time.

Insights into changes, trends

The fact sheet provides intriguing and precise insights into India’s economic landscape. The average MPCE stands at ₹3,773 in rural India and ₹6,459 in urban India. Notably, when considering imputed values of free items, these figures increase to ₹3,860 and ₹6,521, respectively. The fact sheet covers various aspects, including the consumption share of item groups, average MPCE by household type, and figures at both the all-India level and across States and Union Territories.

It provides trends as well. Analysing the trend from 1999-2000 to 2022-23 reveals a significant transformation in MPCE composition in rural and urban areas. There is a noticeable decline in the percentage share of expenditure on food items (especially cereals), accompanied by an increase in the share of spending on fresh fruits and processed foods. There is a surge in non-food expenditures’ share, particularly on durable goods, indicating an improved standard of living and a growing preference for lifestyle enhancements.

HCES, through the collective endeavor of the Indian Statistical Service officers, the Subordinate Statistical Service officers and the entire staff, stands as a beacon of reliability, a valuable tool for shaping the trajectory of New India’s economic policies.

Subash Chandra Malik is an ISS officer, currently posted as Additional Director General, Field Operation Division, NSSO, Ministry of Statistics and Programme Implementation (MoSPI).; Harshvardhan Singh Garhwal is an ISS officer, currently posted as Assistant Director at Regional office-Jaipur, FOD, MoSPI. The views are the authors’ own

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