India’s per capita monthly consumption expenditure witnessed a notable surge of 33-40 percent during the period 2022-23 compared to 2011-12, as per the recent revelations from the government’s Household Consumer Expenditure Survey, unveiled on February 24.
In rural areas, the survey unveiled a substantial 40 percent escalation in per capita monthly consumption, amounting to Rs 2,008, while urban regions experienced a 33 percent rise to Rs 3,510 after adjusting for inflation. This translates to an average annual growth of 3.1 percent for rural consumption and 2.7 percent for urban consumption, whereas India’s real GDP exhibited an average annual growth rate of 5.7 percent during the same timeframe.
The survey, the first of two consecutive Consumer Expenditure Surveys conducted by the statistics ministry, is currently underway for the 12 months starting August 2023. The data collected plays a pivotal role in updating the Consumer Price Index (CPI) and headline inflation rate, which still rely on consumption patterns from the 2011-12 survey.
Previously, a survey conducted in 2017-18 was controversially discarded due to concerns regarding data quality, leaving India’s CPI inflation data stagnant.
Covering 2.62 lakh households, the latest survey categorized data into food items, consumables and service items, and durable goods. This marked an increase from the 347 items included in the 2011-12 survey, totaling 405 items.
A noteworthy addition to the current survey is the incorporation of data on items received free through social welfare schemes. These items were imputed with a value, resulting in an augmentation of the average monthly per capita consumption expenditure in both rural and urban areas.
While the release of the latest survey data addresses a longstanding gap in Indian official statistics, updates to the CPI inflation series hinge upon the completion of the second survey in July this year. This will facilitate a comprehensive overhaul of the inflation series, based on updated consumption patterns.
