10-June-2024-Editorial

HOUSEHOLD CONSUMPTION EXPENDITURE SURVEY (HCES) 

The Household Consumption Expenditure Survey (HCES), undertaken by the National Statistical Office (NSO), offers invaluable insights into the expenditure patterns of households in both rural and urban areas throughout India. It is a comprehensive study conducted every five years to gather data on household consumption patterns, which is essential for various macroeconomic indicators. 

What is the Household Consumption Expenditure Survey? 

• The HCES collects information on the consumption of goods and services by households. 
• It is conducted every five years by the NSO and covers the entire Indian Union, except for a few inaccessible villages in the Andaman and Nicobar Islands. 
• The data collected is used to calculate estimates for household Monthly Per Capita Consumer Expenditure (MPCE) and analyze the distribution of households across different expenditure categories. 

Purpose: 

• To understand typical spending patterns on goods and services. 
• To derive macroeconomic indicators such as Gross Domestic Product (GDP), poverty rates, and Consumer Price Index (CPI) based on household consumption. 

Highlights of survey 

Food Expenditure Preferences: 

• Beverages, Refreshments, and Processed Food: Tamil Nadu showed significant spending percentages, particularly in rural areas. 
• Milk and Milk Products: Northern states like Haryana and Rajasthan exhibited high expenditure in this category. 
• Egg, Fish, and Meat: Kerala households topped the expenditure in this category. 

Overall Food vs. Non-Food Expenditure: 

• Food Expenditure: Constitutes around 46% of total household consumption expenditure in rural India and 39% in urban areas. 
• Non-Food Expenditure: There’s a notable increase in spending on non-food items, with rural expenditure rising from 40.6% in 1999 to 53.62% in 2022-23 and urban expenditure increasing from 51.94% to 60.83%. 

Major Non-Food Expenditure Categories: 

• Conveyance: Remained the top non-food expenditure in both rural and urban areas. 

• Medical Expenses: Particularly high in states like Kerala, West Bengal, and Andhra Pradesh. 
• Durable Goods: Kerala exhibited the highest expenditure on durable goods. 
• Fuel and Light: Significant spending observed in West Bengal and Odisha. 

Regional Variations: 

• Various states exhibited diverse inclinations in expenditure on particular food and non-food items, indicating cultural and regional economic distinctions. 

Growth in Consumption Expenditure: 

• There’s been a substantial increase in consumption expenditure over the past decade. 
• Rural monthly consumption per person increased by 164% from 2011-12 to 2022-23, while urban monthly consumption per person grew by 146%. 
• The rural sector has witnessed faster growth compared to urban areas, leading to a decrease in the difference between urban and rural MPCE over the years. 

Conclusion 

The detailed report of the Household Consumption Expenditure Survey (HCES) 2022-23 provides valuable insights into the spending patterns of rural and urban households across India.  

It highlights significant shifts in expenditure preferences, growth trends, and regional variations, reflecting the diverse socio-economic landscape of the country.  

These findings are crucial for policymakers to formulate targeted strategies for economic development and welfare initiatives.