Household Consumption Expenditure Survey 2023-24

Household Consumption Expenditure Survey 2023-24

The Ministry of Statistics and Programme Implementation (MoSPI) has published the latest Household Consumption Expenditure Survey (HCES) factsheet for 2023-24, offering a comprehensive analysis of India’s consumption trends and economic landscape.About the HCESThe HCES is a pivotal survey conducted by the National Statistical Office (NSO) under MoSPI since 1951 as part of the National Sample Survey (NSS). It evaluates household spending patterns to assess living standards, consumption habits, and economic well-being.

Significance of HCES

• Aids in calculating Consumer Price Indices (CPI) and revising the base year for macroeconomic metrics like Gross Domestic Product (GDP).
• Serves as a critical tool for measuring poverty, inequality, and social welfare.

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Key Findings of HCES 2023-24

1. Increased Consumption Expenditure
   • Rural Areas: Average Monthly Per Capita Expenditure (MPCE) rose by 9.3% to ₹4,122 (up from ₹3,773 in 2022-23).
   • Urban Areas: MPCE grew by 8.3% to ₹6,996 (up from ₹6,459 in 2022-23).
   • The rural-urban consumption gap narrowed significantly, decreasing from 83.9% in 2011-12 to 69.7% in 2023-24, highlighting faster growth in rural consumption.
   • Factoring in imputed values (e.g., welfare benefits like food grains and school uniforms), rural MPCE is ₹4,247, and urban MPCE is ₹7,078.
2. Regional Variations in Spending
   • Highest MPCE:
     • Rural: Sikkim (₹9,377)
     • Urban: Sikkim (₹13,927)
   • Lowest MPCE:
     • Rural: Chhattisgarh (₹2,739)
     • Urban: Chhattisgarh (₹4,927)
   • Among Union Territories, Chandigarh recorded the highest MPCE in both rural (₹8,857) and urban (₹13,425) areas, while Dadra and Nagar Haveli and Daman and Diu, and Jammu & Kashmir reported the lowest rural and urban MPCEs, respectively.
3. Decline in Consumption Inequality
   • The Gini coefficient, an indicator of inequality, fell in both rural (0.266 to 0.237) and urban (0.314 to 0.284) areas compared to 2022-23.
4. Food and Non-Food Expenditure Trends
   • Food Expenditure:
     • Increased to 47.04% in rural areas and 39.68% in urban areas, with the highest spending on beverages, processed foods, and dairy products.
   • Non-Food Expenditure:
     • Rural areas: 52.96% (notably on conveyance, healthcare, and clothing).
     • Urban areas: 60.32% (primarily on conveyance, miscellaneous goods, and rent).
5. Economic Improvement for Lower-Income Groups
   • The bottom 5% of the population saw a remarkable rise in spending:
     • Rural: 22% increase.
     • Urban: 19% increase.
   • Conversely, the top 5% of spenders reported a decline, signifying reduced consumption inequality and improved economic conditions for disadvantaged groups.

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Implications for Policymaking

1. Rural Development
   • Faster rural consumption growth suggests improved incomes due to schemes like PM-KISAN and MGNREGA. Continued investment in rural infrastructure and services is essential.
   • Address rising transport costs by enhancing rural connectivity and public transport systems.
2. Urban Planning
   • High expenditure on rent and transport highlights the need for affordable housing and efficient urban transport networks.
   • Policies must address stagnant income growth for urban middle-income groups to promote balanced economic growth.
3. Reducing Regional Disparities
   • States with low per capita expenditure, such as Bihar and Uttar Pradesh, require targeted interventions in healthcare, education, and job creation to stimulate economic activity.
4. Sectoral Focus
   • Rising spending on services (e.g., transport, entertainment) indicates a shift toward a service-driven economy. Skilling programs and employment generation in these sectors should be prioritized.
5. Consumer Protection and Welfare
   • Increased spending on processed foods necessitates stricter quality standards and regulatory oversight to safeguard consumer health and safety.

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Key Terms

• Monthly Per Capita Expenditure (MPCE): Average monthly spending per individual on basic needs like food, healthcare, education, and transportation.
• Gini Coefficient: A measure of inequality in income or consumption, where 0 signifies perfect equality, and 100 denotes complete inequality.

These findings provide critical insights for designing policies that promote equitable growth, enhance living standards, and ensure inclusive economic development.

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