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India’s average household consumption spending on a per capita basis rose about 3.5% in real terms through August 2023 to July 2024 from a year ago, as per the Household Consumption Expenditure Survey (HCES), and the Centre asserted this signals a decline in consumption inequality as well as a narrowing gap between urban and rural spends.
The initial HCES findings that are used to assess trends in economic well-being, estimate poverty levels and update the basket and weightages of consumer goods and services used to formulate the Consumer Price Index (CPI) that measures retail inflation, were released by the Statistics Ministry on Friday.
This is the second year in a row that the HCES was conducted and its findings were released, after a 11-year hiatus as the government had junked the results of the 2017-18 survey citing “quality” concerns about the data. “Sustained momentum in rural consumption continues as urban-rural gap narrows down further in 2023-24 from the level of 2022-23,” the Ministry said in a statement.
In real terms, the average rural Monthly Per Capita Expenditure or MPCE rose 3.53% over 2022-23 levels to ₹2,079 and grew at a fractionally slower pace of 3.48% for urban households to ₹6,996. The 2022-23 HCES had revealed a 3.5% compounded annual growth in rural spends over 11 years since 2011-12, with urban households clocking a 3% growth.
“Consistent with the trend observed in 2022-23, non-food items remain the major contributor to the household’s average monthly expenditure in 2023-24 with about 53% and 60% share in MPCE in rural and urban areas respectively,” a fact sheet on the survey noted.
Despite the ratio of food spends to non-food spends suggesting a dip in expenditure on food and beverages, this was primarily due to a decline in spending on edible oils, which offset spikes in wallet shares of items like vegetables over a period of generally high food inflation.
The urban-rural gap in MPCE has declined to 71% in 2022-23 from 84% in 2011-12, and dropped further to 70% in 2023-24, while the increase in the average MPCE in 2023-24 from the level of 2022-23 has been the maximum for the bottom 5% to 10% of India’s population, for both rural and urban areas, the fact sheet said.
“Consumption inequality, both in rural and urban areas has declined from the level of 2022-23. The Gini coefficient has declined to 0.237 in 2023-24 from 0.266 in 2022-23 for rural areas and to 0.284 in 2023-24 from 0.314 in 2022-23 for urban areas,” the Ministry concluded.
The MPCE estimates from the latest survey are based on data collected from 2,61,953 households across all States and Union Territories in the country, with about 59% of those households surveyed in rural India
Published – December 27, 2024 06:34 pm IST
