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Context: The Ministry of Statistics and Programme Implementation (MoSPI) decided to conduct two consecutive surveys on household consumption expenditure during 2022-23 and 2023-24.
The Household Consumption Expenditure Survey (HCES) is conducted by the Ministry of Statistics and Programme Implementation (MoSPI).
The survey collects data on what households in India spend on goods and services.
This data helps in understanding trends in economic well-being, updating the Consumer Price Index (CPI), and measuring poverty, inequality, and social exclusion.
The survey also helps update the basket of goods and services used for calculating the CPI and tracks changes in the standard of living.
HCES 2023-24: Ongoing from August 2023 to July 2024. The summary results for this year have been released in the form of a factsheet.
Without imputed values for free items:
Rural MPCE: Rs 4,122
Urban MPCE: Rs 6,996
With imputed values for free items (like government benefits):
Rural MPCE: Rs 4,247
Urban MPCE: Rs 7,078
Nominal increase in MPCE (compared to 2022-23):
Rural areas: +9%
Urban areas: +8%
Rural-Urban Gap:
In 2022-23: 84% higher in urban areas
In 2023-24: 70% higher in urban areas
This means that rural consumption is growing at a faster pace.
The bottom 5-10% of the population (ranked by consumption) has seen the highest increase in MPCE, both in rural and urban areas, indicating more inclusive growth.
Rural Areas:
Non-food items make up 53% of rural MPCE.
Major non-food expenditures include:
Conveyance (e.g., transport costs)
Clothing, bedding, and footwear
Miscellaneous goods & entertainment
Durable goods (e.g., vehicles, household appliances)
Non-food items make up 60% of urban MPCE.
Major food items contributing to household spending:
Beverages, refreshments, and processed foods
Milk & milk products
Vegetables
Consumption Inequality: The survey measures how evenly or unevenly consumption is distributed across different households using the Gini coefficient.
Rural Areas: The Gini coefficient dropped from 266 in 2022-23 to 0.237 in 2023-24, indicating a decline in inequality.
Urban Areas: The Gini coefficient dropped from 314 in 2022-23 to 0.284 in 2023-24, also showing reduced inequality.
MPCE across different income groups: The survey also divides households into fractiles (income groups) to show how different income groups are doing.
Bottom 5%:
Rural: Rs 1,677
Urban:Rs 2,376
Top 5%:
Rural: Rs 10,137
Urban: Rs 20,310
Bottom 5% rural: Increase of 22%
Bottom 5% urban: Increase of 19%
Rural MPCE: Highest in Sikkim (Rs 9,377) and lowest in Chhattisgarh (Rs 2,739).
Urban MPCE: Highest in Sikkim (Rs 13,927) and lowest in Chhattisgarh (Rs 4,927).
Chandigarh has the highest MPCE in both rural (Rs 8,857) and urban (Rs 13,425) areas.
Dadra and Nagar Haveli and Daman and Diu have the lowest MPCE in rural areas (Rs 4,311), while Jammu & Kashmir has the lowest in urban areas (Rs 6,327).
Non-food Items Dominate Expenditure: Both in rural and urban India, non-food items contribute more to total consumption, with categories like conveyance, clothing, durable goods, and entertainment being major contributors.
Consumption Patterns: In both rural and urban India, beverages and processed foods contribute the most to food-related expenditure.
Improvement in Inequality: There is a clear decline in income inequality between 2022-23 and 2023-24, both in rural and urban areas.
The findings of the HCES 2023-24 highlight the ongoing economic recovery and the narrowing gap between rural and urban consumption.
Consumption inequality, both in rural and urban areas, has declined from the level of 2022-23.
The difference between Rural and Urban MPCE has narrowed substantially over the years, implying the success of government policies in improving Rural incomes.
Policymakers can use this data to design targeted interventions to further reduce inequality and support sustainable economic growth.
By: Shubham Tiwari ProfileResourcesReport error
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