The latest HCES 2022-23 data reveals a significant rise in rural consumption expenditure over the past decade, outpacing urban growth trends. Meanwhile, urban areas witness a notable decline in the share of expenditure on food, indicating shifting consumption patterns.
According to the latest Household Consumption Expenditure Survey (HCES) 2022-23 released by the Ministry of Statistics and Programme Implementation (MoSPI), the disparity in average monthly per capita consumption expenditure (MPCE) between rural and urban households has decreased to 71.2 per cent in 2022-23 from 83.9 per cent in 2011-12. This indicates that rural consumption spending has outpaced urban consumption spending over the past 11 years.
The survey reveals that rural average monthly consumption spending per person surged to Rs 3,773 per month in 2022-23 from Rs 1,430 per person in 2011-12, marking a notable 164 per cent increase. Conversely, urban average monthly consumption expenditure per person rose by 146 per cent to Rs 6,459 in 2022-23 from Rs 2,630 per person in 2011-12. Notably, while the Household Consumption Expenditure surveys are conducted every five years, the government did not release the results of its 75th round for July 2017-June 2018, citing significant variations in consumption patterns and changes. The leaked survey data indicated a decline in consumption expenditure.
As per the HCES factsheet, the average monthly per capita consumption expenditure (MPCE) for the bottom five per cent of the rural population stands at Rs 1,373, whereas for the corresponding segment in urban areas, it amounts to Rs 2,001. Conversely, the top five per cent of both rural and urban populations exhibit higher MPCE figures of Rs 10,501 and Rs 20,824, respectively. This indicates that while the MPCE for the top five per cent of rural inhabitants is 7.65 times that of their bottom five per cent counterparts, the MPCE for the top five per cent of urban dwellers surpasses that of their bottom five per cent by over 10 times.
In the fiscal year 2022-23, the expenditure share on food in rural India accounted for 46 per cent (Rs 1,750), whereas in urban areas, it constituted 39 per cent (Rs 2,530). Comparatively, in 2011-12, these figures stood at 52.90 per cent for rural India and 42.62 per cent for urban India, respectively. Such fluctuations carry implications for the consumer price index-based inflation.
The increase in non-food consumption expenditure in both rural (54 per cent) and urban India (61 per cent) in 2022-23, compared to 2011-12, was primarily driven by a surge in spending on conveyance, consumer services, and durable goods. Conversely, the proportion of expenditure on cereals, pulses, and vegetables showed a decline during the same period.
According to the survey report, when factoring in the imputed cost of food grains distributed by the government and other complimentary items provided under government schemes, the average monthly consumption expenditure amounted to Rs 3,860 in rural areas and Rs 6,521 in urban areas. This indicates that such consumption expenditure is only marginally higher by Rs 87 in rural areas and Rs 62 in urban areas when compared to expenditure excluding the value of complimentary items.
Considering the imputed value of complimentary items, the bottom five per cent of India's rural population spends approximately Rs 1,441, only slightly higher than the Rs 1,373 spent without factoring in the complimentary items. In urban areas, consumption expenditure for the bottom five per cent amounts to Rs 2,001 without including the imputed value of complimentary items, rising to Rs 2,087 after their inclusion.
The HCES gathers data on household consumption patterns of goods and services. These latest survey results mark the end of a long hiatus of over 10 years since the government abandoned the 2017-18 survey following the unauthorized disclosure of results indicating a consumption decline.
To revise the 'base year' for macroeconomic indicators, the Ministry of Statistics and Programme Implementation (MoSPI) decided to conduct two consecutive surveys during 2020-21 and 2021-22. However, due to the onset of the Covid-19 pandemic, the 2020-21 survey could not commence as scheduled. Consequently, the first of the two consecutive surveys began in August 2022 and concluded in July 2023. The Ministry has released only a factsheet for the 2022-23 period and plans to publish a comprehensive report shortly.