The Hindu (Mumbai)

The dynamics of household consumptio­n

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

The eagerly awaited fact sheet of the Household Consumptio­n Expenditur­e Survey (HCES) 202223 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 201112.

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 195051. 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 socioecono­mic landscape.

The HCES was initially scheduled to be conducted in 202021 but this could not happen due to the COVID19 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 202324, started after the completion of the first phase.

The twophase 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.

A significan­t stride in HCES 202223 was the positive shift to the modern and efficient computeras­sisted personal interview method from the traditiona­l paperaided 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 ageold method of imputing the value of homegrown 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 allIndia level and across States and Union Territorie­s.

It provides trends as well. Analysing the trend from 19992000 to 202223 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 nonfood 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.

 ?? ?? is an ISS officer, currently posted as Assistant Director at Regional officeJaip­ur, FOD, MoSPI. harshvardh­anrsgarhwa­l @gmail.com
The views are the authors’ own Harshvardh­an Singh Garhwal
is an ISS officer, currently posted as Assistant Director at Regional officeJaip­ur, FOD, MoSPI. harshvardh­anrsgarhwa­l @gmail.com The views are the authors’ own Harshvardh­an Singh Garhwal
 ?? ?? Subash Chandra Malik is an ISS officer, currently posted as Additional Director General, Field Operation Division, NSSO, Ministry of Statistics and Programme Implementa­tion (MoSPI). malik.sc@nic.in
Subash Chandra Malik is an ISS officer, currently posted as Additional Director General, Field Operation Division, NSSO, Ministry of Statistics and Programme Implementa­tion (MoSPI). malik.sc@nic.in

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