Consumption spending survey

July 5, 2023
Posted by: OptimizeIAS Team
Category: DPN Topics

Consumption spending survey

Subject :Economy

Section: National Income

In News: Maharashtra facing widening inequality as per the shelved 2017-18 Household Consumption Expenditure Survey or HCES.

Key Points:

Centre had junked the findings of the HCES, conducted from July 2017 to June 2018, the only official estimates on consumer spending currently available are from the 2011-12 Survey.
Rural population saw their average monthly spends fall, as this was just 45% of the ₹4,400-odd spent by average households in cities in 2017-18. This proportion stood at 54% in 2011-12.
Central sample data was not published by NSO, State sample results are not compared with Central sample results.

Household Consumption Expenditure Survey

Household consumption data collected from nationwide samples of households in several rounds of NSS since 1950-51 have been extensively used for studies on levels of living in India and for the measurement of absolute poverty, including studies on disparities across States and regions, sectors, socio-economic classes etc.
The survey estimates the average monthly per capita consumption expenditure (MPCE), an indicator of living standards and purchasing power.
Consumer expenditure comprises all expenditure incurred by the household on domestic account including consumption out of home-grown produce and out of wages in kind, gifts, loans, free collections, etc.
The survey asks consumption related questions within the reference period the time period for which the survey applies, different reference periods – ‘last 7 days’ and ‘last 30 days’ have been used in different rounds.
Initially NSO used to conduct annual large scale survey, but from 1972 the surveys were done quinquennially (every 5 years).
Traditionally conducted every five years, the HCES is used to arrive at estimates of poverty levels as well as to review key economic indicators like Gross Domestic Product (GDP).
The results of the Survey are also utilised for updating the consumption basket and revise the base for the Consumer Price Index (CPI) used to measure inflation experienced on the ground by households.
The government had kicked off a fresh HCES last July, adding new questions to capture information about items received by households free of cost through government welfare schemes.
The outcomes of the Survey which would have concluded last month, are likely to take at least a year to process.