The Household Consumption Expenditure (HCE) survey of 2022-23 contains state-wise analysis of Monthly Per Capita Expenditure (MPCE). This is published after a long gap of 11 years after the previous report in 2011-12. Both urban & rural have reported a decrease in the share of MPCE on food items, while that spent on non-food items increased.
Rising expenditures on both food and non-food items have been a prominent topic of discussion recently in the light of elections. The sudden spike in vegetable prices this month, attributed to various factors, has heightened concerns about inflation and increasing costs.
In this context, the much-anticipated 2022-23 survey report titled “Household Consumption Expenditure (HCE)” has been released by the National Sample Survey (NSS) Organization. This report, with a state-wise analysis of Monthly Per Capita Expenditure (MPCE), was published after a long gap of 11 years after the previous report in 2011-12, despite the NSS’s mandate to publish these reports periodically. The timely release of these reports is crucial as they inform policy formulation and governance, directly impacting the lives of every citizen.
In this story, we look at some of the key indicators and insights highlighted in the latest NSS report.
Notes:
- Unlike its previous reports, the NSS has limited the 2022-23 survey to only 18 major states with populations of over 25 million. Consequently, our analysis focuses solely on these states.
- Additionally, the NSS has exclusively used the Modified Mixed Reference Period (MMRP) for calculating MPCE in this survey. Unlike earlier reports, it has not published separate MPCE data based on the Uniform Reference Period (URP) and Mixed Reference Period (MRP). Therefore, the analysis in this story is confined to the MMRP data.
What is MPCE?
The NSS defines MPCE (Monthly Per Capita Expenditure) as “the total value of monthly consumption of goods and services of the household divided by the number of members of the household.” Following this definition, the NSS in its HCE report provides detailed information on the types of households surveyed and the specific goods and services considered for evaluating and arriving at the MPCE figures.
MPCE increased significantly from 2011-12 to 2022-23
The 2022-23 HCE report details MPCE figures for the 18 major states included in the survey. Analysis shows that the average MPCE in India at nominal prices has significantly increased. In rural areas, MPCE increased from 1,054 rupees in 2009-10 to 1,430 rupees in 2011-12, and further to 3,773 rupees in 2022-23. In urban areas, MPCE rose from 1,984 rupees in 2009-10 to 2,630 rupees in 2011-12, and then to 6,459 rupees in 2022-23 at nominal prices.
At real prices (the base year 2011-12), the increase is as follows: in rural areas, MPCE grew from 1,239 rupees in 2009-10 to 1,430 rupees in 2011-12, reaching 2,008 rupees in 2022-23. In urban areas, it went from 2,358 rupees in 2009-10 to 2,630 rupees in 2011-12, and up to 3,510 rupees in 2022-23.
Thus, at nominal prices, the MPCE in rural and urban areas increased by 164% and 146%, respectively while at real prices (base year of 2011-12), the MPCE increased by 40% in rural areas and 33% in urban areas.
11 states report decrease in consumption expenditure difference between rural and urban areas
The report highlights a decreasing trend in the difference between rural and urban MPCE compared to the previous survey period of 2011-12. In the 2011-12 report, five states—Jharkhand, West Bengal, Maharashtra, Karnataka, and Odisha—showed stark differences of over 90% in MPCE between the rural and urban areas, with Jharkhand and West Bengal exceeding 100%. Punjab, Kerala, and Bihar reported the lowest differences at 19%, 27%, and 33%, respectively.
However, the 2022-23 report shows a reduction in these differences. None of the states reported an MPCE difference of over 90%, unlike in 2011-12. Instead, six out of the 16 major states (excluding Andhra Pradesh and Telangana, which were part of a united state in 2011-12) reported differences of over 70%, with Chhattisgarh and Kerala having the highest and lowest differences at 82% and 19%, respectively.
Furthermore, 11 out of the 16 major states reported a decrease in the MPCE difference between rural and urban areas compared to the 2011-12 period. Conversely, three states—Punjab, Bihar, and Gujarat—reported slight increases in the difference, from 19% to 23%, 33% to 41%, and 68% to 74%, respectively.
MPCE decreased on Food items, while it has increased on Non-food items
The report also analysed trends in MPCE on different types of food and non-food items, revealing notable shifts in consumption patterns between rural and urban areas. Both regions have reported a decrease in the share of MPCE on food items, while that spent on non-food items increased. From 2011-12 to 2022-23, the share of MPCE on food items decreased from 53% to 46% in rural areas and from 42% to 39% in urban areas. Comparatively, in 1999-00, these shares were 59% and 48% for rural and urban areas, respectively, indicating a consistent decline in expenditure on food items over the past two decades.
Among the 13 food items analysed for MPCE, 7 in rural areas and 9 in urban areas showed decreasing trends compared to 2011-12. Notably, the share of Cereals in MPCE reduced by more than half, dropping from 10.6% to 4.89% in rural areas and from 6.61% to 3.62% in urban areas, while the share spent on beverages and processed foods increased from 7.9% to 9.6% in rural areas and from 9% to 10.6% in urban areas.
Conversely, MPCE on non-food items rose from 47% to 53% in rural areas and from 57% to 60% in urban areas from 2011-12 to 2022-23. In 1999-00, these shares were 41% and 52%, respectively, underscoring the upward trend in expenditure on non-food items.
Of the 14 non-food items considered for MPCE, the share of expenditure on nine showed increasing trends in rural areas and seven in urban areas. Notably, the share of expenditure on conveyance increased from 4.2% to 7.5% in rural areas and from 6.5% to 8.5% in urban areas from 2011-12 to 2022-23.
New Categorizations Included in MPCE Data Publication
The NSS has introduced three new categorizations in the publication of MPCE data compared to 2011-12. Firstly, MPCE data now includes imputation values, accounting for items like laptops, rice, and other goods received at no cost through government schemes. These imputed values are published separately, but the NSS categorically states they are not compared directly with non-imputed values for various reasons.
Secondly, the NSS categorizes MPCE data by social groups such as Scheduled Castes (SC), Scheduled Tribes (STs), and Others. Lastly, the NSS publishes MPCE data categorized by types of employment, highlighting expenditure trends among various occupational groups in rural and urban settings.
