Household Consumption Expenditure Survey (HCES) 2022-23

General Studies Paper-3

Context: The National Sample Survey (NSS) Office released the key results of the Household Consumption Expenditure Survey (HCES) 2022-23.

About

• The National Sample Survey Office (NSSO) under Ministry of Statistics and Programme Implementation has been conducting household surveys on consumption/consumer expenditure at regular intervals as part of its rounds, normally of one-year duration.
• Since 1972, NSSO has been conducting the Consumer Expenditure Survey.
• It  is designed to collect information on consumption of goods and services by the households.
• The survey aims at generating estimates of household Monthly Per Capita Consumption Expenditure (MPCE)and its distribution separately for the rural and urban sectors of the country, for States and Union Territories, and for different socio-economic groups.

Methodology Used

• In the present survey, three 3 questionnaires were used, covering:
• Food items;
• Consumables and services items, and;
• Durable goods used.
• The survey had a separate provision for collection of information on the quantity of consumption of the number of items received and consumed by the households free of cost through various social welfare programmes.

Changes in the Methodology

• First, there is change in item coverage with inclusion of new items and merging some of the obsolete items. Overall, the number of items covered has increased from 347 to 405 items.
• Secondly, there have been changes in the questionnaire of the survey.
  • Instead of a single questionnaire as used in earlier surveys, HCES 2022-23 uses four separate questionnaires for food, consumables and services items, and durable goods, apart from a separate questionnaire for canvassing household characteristics to be used in three separate monthly visits in a quarter.
  • Thus, there have been multiple visits for data collection instead of the usual practice of a single visit in the earlier surveys.

Major Findings

• Rise in Income:The income levels of both the Urban and Rural households have risen since the last survey, with Rural households showing a sharper growth in spending.
• Rise in MPCE: The average Monthly per capita consumption expenditure of both Urban and Rural households has doubled in the 11-year period with both spending less on food items.
  • Of the total expenditure, 46% was spent on food items in Rural households and 39% in Urban homes in 2022-23.
• Spending increased in Rural Households:Household spending increased 2.6 times in Rural areas and 2.5 times in Urban areas since the last survey in 2011-12.
  • The gap between Urban and Rural household consumption has narrowed, and Indian households have been spending more on non-food items.
• Gap Between Rich and Poor:The top 5% of India’s Rural population has 7 times the MPCE of the bottom 5 % rural population.
  • The top 5 % of India’s urban population has 10 times the MPCE of the bottom 5 % Urban population.
• Among the States,the MPCE is the highest in Sikkim for both rural (₹7,731) and urban areas (₹12,105).
  • It is the lowest in Chhattisgarh, where it was ₹2,466 for rural households and ₹4,483 for urban household members.

It can be inferred from the data presented in the survey that:

• The difference between Rural and Urban MPCE has narrowed substantially over the years, implying the success of government policies in improving Rural incomes.
• While the difference is more pronounced at the lower levels, the gap is bigger at the top, reflecting an increase in inequality at higher income levels.
• The poorest Rural households have been able to spend at a much closer level to their Urban Counterparts, implying that government’s policy initiatives for enhancing Rural incomes have worked to an extent.