Household Consumption Expenditure Survey (HCES) 2023-24
Kartavya Desk Staff
Syllabus: Economics
- •Source: PIB*
Context: The Ministry of Statistics and Programme Implementation (MoSPI) has released the Household Consumption Expenditure Survey (HCES) 2023-24, highlighting increasing MPCE (Monthly Per Capita Expenditure) and declining urban-rural consumption gaps.
About Household Consumption Expenditure Survey (HCES):
What is HCES?
• A nationwide survey conducted to assess household consumption patterns, living standards, and expenditure trends.
• Provides essential data for economic planning, poverty measurement, and updating the Consumer Price Index (CPI).
Survey Details:
• Conducted by: National Statistical Office (NSO) under MoSPI.
• Methodology: Multistage stratified sampling, covering both rural and urban areas.
• Coverage: 2023-24 Sample: 2,61,953 households (1,54,357 rural, 1,07,596 urban). Conducted across all States and Union Territories, except a few remote villages in Andaman & Nicobar Islands.
• 2023-24 Sample: 2,61,953 households (1,54,357 rural, 1,07,596 urban).
• Conducted across all States and Union Territories, except a few remote villages in Andaman & Nicobar Islands.
• Survey Period: August 2023 – July 2024.
Key Findings of HCES 2023-24:
• Rising Household Consumption Expenditure
• MPCE (Monthly Per Capita Expenditure) at Current Prices: Rural: ₹4,122 (2023-24) vs. ₹3,773 (2022-23). Urban: ₹6,996 (2023-24) vs. ₹6,459 (2022-23).
• Rural: ₹4,122 (2023-24) vs. ₹3,773 (2022-23).
• Urban: ₹6,996 (2023-24) vs. ₹6,459 (2022-23).
• Urban-Rural Consumption Gap: Declined to 70% in 2023-24 from 71% in 2022-23 and 84% in 2011-12.
• Declined to 70% in 2023-24 from 71% in 2022-23 and 84% in 2011-12.
• State-wise Trends: Odisha (14%) saw the highest increase in rural MPCE, while Punjab (13%) saw the highest rise in urban MPCE. Kerala recorded the lowest urban-rural MPCE gap (18%), while Jharkhand had the highest (83%).
• Odisha (14%) saw the highest increase in rural MPCE, while Punjab (13%) saw the highest rise in urban MPCE.
• Kerala recorded the lowest urban-rural MPCE gap (18%), while Jharkhand had the highest (83%).
• Decline in Consumption Inequality:
• Gini Coefficient (measure of consumption inequality) declined: Rural India: 0.237 (2023-24) vs. 0.266 (2022-23). Urban India: 0.284 (2023-24) vs. 0.314 (2022-23).
• Rural India: 0.237 (2023-24) vs. 0.266 (2022-23).
• Urban India: 0.284 (2023-24) vs. 0.314 (2022-23).
• All 18 major states recorded a decline in consumption inequality.
• Share of Expenditure on Food and Non-Food Items:
• Rural Areas: 47% of MPCE spent on food, with highest expenditure on beverages (9.84%), milk (8.44%), and vegetables (6.03%).
• Urban Areas: 40% of MPCE spent on food, highest on beverages (11.09%), milk (7.19%), and vegetables (4.12%).
• Non-food expenditure dominated by transport, medical expenses, durable goods, and rent.
• Variation in MPCE Across Social Groups:
• Highest MPCE among ‘Others’ category, followed by OBCs, SCs, and STs.
• MPCE for STs increased from ₹3,016 (rural) and ₹5,414 (urban) in 2022-23 to ₹3,363 (rural) and ₹6,030 (urban) in 2023-24.
• Variation in MPCE Across Occupations:
• Highest MPCE in rural areas: Salaried non-agricultural households (₹5,005).
• Highest MPCE in urban areas: ‘Others’ category (₹9,159).
Positive Outcomes from the Report:
• Rising Consumption Levels: Increased MPCE in all states, indicating improved living standards and economic activity.
• Reduction in Consumption Inequality: Declining Gini coefficient suggests better income distribution.
• Narrowing Urban-Rural Gap: Indicates rising rural purchasing power, reducing economic disparity. Stronger Impact of Social Welfare Programs: Higher imputed MPCE shows better access to subsidized goods and services.
• Better Policy Insights: Provides updated data for economic planning, poverty measurement, and CPI computation.
Negative Findings from the Report:
• Persisting Urban-Rural Gap: Though declining, rural MPCE remains significantly lower than urban MPCE.
• High Consumption Disparity Across States: States like Jharkhand and Chhattisgarh still show large urban-rural divides.
• Limited Growth in Maharashtra & Karnataka: Lowest increase in MPCE (rural: 3%, urban: 5%), indicating economic stagnation.
• High Share of Expenditure on Non-Essential Goods: Rising spending on processed foods and beverages over essential food grains.
• Vulnerable Social Groups Still Lagging: STs and SCs continue to have lower MPCE compared to OBCs and General category.
Way Ahead:
• Targeted Rural Economic Growth: Enhance employment opportunities, infrastructure, and digital connectivity to boost rural income.
• Bridging State-Level Disparities: State-specific interventions for states with high urban-rural MPCE gaps.
• Sustainable Consumption Pattern: Promote balanced spending on essentials, healthcare, and savings.
• Strengthening Social Welfare Programs: Expand direct benefit transfers (DBT) and rural livelihood missions to further reduce inequality.
• Data-Driven Policy Formulation: Utilize HCES data for poverty alleviation, inflation control, and inclusive economic growth.
Conclusion:
The Household Consumption Expenditure Survey 2023-24 reflects positive economic trends, including rising MPCE, declining consumption inequality, and narrowing urban-rural gaps. However, persistent regional and social disparities highlight the need for targeted policy interventions. Leveraging HCES insights can drive inclusive growth, ensuring equitable economic prosperity across India.
Insta Links:
• MOSPI Report
Consider the following statements: (UPSC-2020)
• The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI).
• The WPI does not capture changes in the prices of services, which CPI does.
• The Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates.
Which of the statements given above is/are correct?
• 1 and 2 only
• 1, 2 and 3
Answer: a)