Rome: The Ministry of Statistics and Programme Implementation (MoSPI) has released the highlights of the 2022-23 Household Consumption Expenditure Survey, throwing light on private final consumption expenditure, income inequalities and other quasi-demographic indicators useful for mapping the progress of India’s economy.
The detailed report — which saw a survey of 2.76 lakh-plus households in both rural and urban areas from August 2022 to July 2023 — will be released later.
Usually done after every five years, the survey findings this time have been released after a gap of 11 years. The last such exercise was done in 2011-2012.
ThePrint presents five key takeaways from the MoSPI’s report.
Spending power nearly tripled
According to the survey, an Indian family on average monthly spent Rs 6,521 in urban areas and Rs 3,860 in rural areas (including the imputed value of the social transfers they get for free). As the previous survey report of financial year 2017-18 was junked allegedly due to “discrepancies”, hence it is only possible to compare figures released in 2011-12 and the surveys conducted prior.
In 2011-12, the average monthly family spending was about Rs 2,630 and Rs 1,430 in urban and rural areas. Thus, the average monthly consumption expenditure has risen by 2.5 times in urban and 2.7 times in rural India.
Rural-urban gaps are down
Data also shows that the gaps between rural and urban India’s spending are also coming down. According to the report in the 1999-2000 round of the survey, Urban Indians used to spend 76 percent more than rural Indians, which jumped to 91 percent in 2004-05. By 2011-12, this gap came down to 84 percent and further shrunk to about 68.9 percent in 2022-23.
Food spending comes down
In the previous rounds of the Consumption Expenditure Surveys, spending on food used to dictate the consumption expenditure in the hinterland, but that has changed by 2022-23. Food no longer is the determinant of rural spending.
In 2011-12, rural Indian families used to allot around 53 percent of their household expenditure on food items of which cereals alone took 10.75 percent share. However, by 2022-23, the spending on food now accounts for 46.38 percent — majorly because spending on cereals has come down to 4.9 percent.
In urban India, food spending never dictated the expenditures, as seen in 43 percent in 2011-12. It has come down to 39 percent by 2022-23.
If we compare 2011-12 figures to that of 1999-00, the growth in expenditure is a little (not much) higher. Between this period, the monthly private consumption expenditure had risen from Rs 486 to Rs 1,430 in rural (nearly 3 times) and Rs 855 to Rs 2,630 in urban (3 times) India. These amounts however, exclude the imputed values of the free social transfers the households get from the government.
The report mentions that even if the imputed value of free items is included, the food expenditure in rural areas is still low — about 47.47 percent (cereals, 6.92 percent) and 39.7 percent in urban areas (cereals, 4.5 percent).
10x gap between rich & poor
Based on the spending amounts of the surveyed respondents, the report divided their class into ‘fractiles’ which gives an idea of inequality in spending. According to the release, the monthly per capita consumer expenditure (MPCE) of the bottom 5 percent is Rs 2,087 in urban and Rs 1,441 rural areas. In contrast, it is Rs 20,846 in urban and Rs 10,581 in rural areas for the top 5 percent. This means that the spending gap between the richest and the poorest households is about ten times.
In fact, the gap between the 80-70 percent fractiles (after the top 20 percent but above 70 percent) is also quite wide. People in the 70-80 percent bracket spent Rs 4,551 in rural and Rs 7,721 in urban areas, which means that their incomes were also less than half of what the top bracket spent on private consumption every month.
South India & Northeast are top spenders
ThePrint analysed regional variations in the data and clubbed states into five groups — north, south, east, west and the northeast. Barring small states and Union Territories, the South and the Northeast topped the spending charts.
According to the data, in Northeast India, a family spends on average Rs 7,579 per month in urban areas and Rs 4,942 in rural areas. In the five Southern states, on average, the MPCE is Rs 7,551 in urban and Rs 5,190 in rural areas.
In the north, the MPCE is Rs 6,686 and Rs 4,700 in urban and rural areas, respectively. The East sits at the bottom, with an average MPCE of Rs 4,994 and Rs 3,046 in urban and rural areas.
Among the states, Telangana was the top spender in urban areas with an average spending of Rs 8,251 (whereas it stands at fifth position if we include Chandigarh, Sikkim, Goa, Arunachal Pradesh). Chhattisgarh and Bihar had the least urban MPCE with Rs 4,557 and Rs 4,819, respectively.
Nikhil Rampal is a visiting fellow at the CVoter Foundation and currently studies economics in Europe. He tweets at @NikhilRampal1.
(Edited by Tony Rai)
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