Household Consumption Expenditure Survey (HCES) for 2022-23

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Context

• The National Sample Survey Office (NSSO), Ministry of Statistics and Programme Implementation has conducted Household Consumption Expenditure Survey (HCES) during August 2022 to July 2023.
• The survey which was carried out between August 2022 and July 2023 was the first one after 2011-12.

HCES

• This survey on household consumption expenditure aims at generating estimates of Household Monthly Per Capita Consumption Expenditure (MPCE) and its distribution separately for the rural and urban sectors of the country, for States and Union Territories, and for different socio-economic groups. The summary results of HCES: 2022-23 relating to MPCE are being released in the form of a factsheet. 
• The estimates of MPCE are based on the data collected from 2,61,746 Households (1,55,014 in rural areas and 1,06,732 in urban areas) in the central sample spread overall States and Union Territories in the country.

Why is the HCES Survey conducted?

The Survey usually carried out every 5 years shows:

1. What Indian households are consuming and spending on;
2. Plays a key role in reviewing critical economic indicators like, the GDP, poverty levels, and the Consumer Price Inflation.

The Survey helps the Policymakers and Experts to:

1. Assess the income and expenditure levels of households;
2. How and where they are spending their money, and;
3. To gauge the efficacy of the policy measures.

Importance of Consumer Expenditure Survey

The Consumer Expenditure Survey (CES) is a survey carried out by the NSSO. It is conducted once every 5 years to gather data on the spending pattern of the households, both Rural and Urban in the consumption of goods and services.

Since 1972, NSSO has been conducting the Consumer Expenditure Survey once every 5 years. The data gathered in the survey:

1. Indicates the average expenditure of households on various goods and services, goods including both food and non-food items;
2. Helps estimate the household’ Monthly Per Capita Consumer Expenditure;
3. Helps producers to assess the market, and make plans for the production of goods and services;
4. Helps assess the demand dynamics and shifting of consumers’ priorities, both Rural and Urban;
5. Helps in assessing the living standards of the households;
6. Helps the policymakers to address any anomaly in the policies & employ right strategies regarding the production of goods and services;
7. Food consumption data from HCES is an important source of information on food security and nutrition.

How is the present Survey different from the earlier ones?

The questionnaire of HCES 2022-23 contained 405 items as against 347 items in 2011-12. In the earlier surveys by NSS on household consumption expenditure, a single questionnaire was used.

In the present survey, three 3 questionnaires were used, covering:

1. Food items;
2. Consumables and services items, and;
3. Durable goods used.

The survey had a separate provision for collection of information on the quantity of consumption of the number of items received and consumed by the households free of cost through various social welfare programmes.

• In HCES:2022-23, the usual practice of imputation of the value figures for consumption out of (i) home-grown/home-produced stock and (ii) gifts, loans, free collection and goods received in exchange of goods and services etc. has been continued; and accordingly, estimates of MPCE have been generated. These estimates are presented in Section A.
• Besides, a provision for collection of information on the quantity of consumption for a number of items, received and consumed by the households free of cost through various social welfare programmes has been made in HCES:2022-23. Consequently, the value figures for (i) food items: Rice, Wheat/Atta, Jowar, Bajra, Maize, Ragi, Barley, Small Millets, Pulses, Gram, Salt, Sugar, Edible Oil and (ii) non-food items: Laptop/PC, Tablet, Mobile Handset, Bicycle, Motor Cycle/Scooty, Clothing (school uniform), Footwear (school shoe etc.) received free of cost by the households through these programmes, have been imputed using an appropriate method.
• Accordingly, another set of estimates of MPCE considering imputed values of these items and of consumption out of home produce, free collection, gifts, loans etc. has also been compiled for HCES: 2022-23. These estimates are presented in Section B.

A.Estimates of MPCE (without considering imputed values of items received free of cost through various social welfare programmes in HCES:2022-23)

The values of average MPCEfor HCES:2022-23 (without considering the imputed values of the items received free of cost through social transfer), NSS 68^th(2011-12) and NSS 66^th(2009-10) rounds using Modified Mixed Reference Period (MMRP[1]) at all-India level at currentprices and at 2011-12 prices are given in Table 1 and Table 2 below:

Table 1: Average MPCE(Rs.) atcurrent Prices(without imputation)

Survey	Period	Rural	Urban
HCES: 2022-23	August 2022- July 2023	3,773	6,459
68th round (2011-12)	July 2011-June 2012	1,430	2,630
66th round (2009-10)	July 2009-June 2010	1,054	1,984

Table 2: Average MPCE (Rs.) at 2011-12 Prices (without imputation)

Survey	Period	Rural	Urban
HCES: 2022-23	August 2022- July 2023	2,008	3,510
68th round (2011-12)	July 2011-June 2012	1,430	2,630
66th round (2009-10)	July 2009-June 2010	1,238	2,359

B.Estimates of MPCE (considering imputed values of items received free of cost through various social welfare programmes in HCES:2022-23^@)

The values of average MPCEfor HCES:2022-23(considering imputed values of items received free of cost through social transfer), NSS 68^th(2011-12) and NSS 66^th(2009-10) rounds at all-India level at current prices and at 2011-12 prices are given in Table 3 and Table 4 below:

Table 3: Average MPCE (Rs.) at current Prices (with imputation for 2022-23)

Survey	Period	Rural	Urban
HCES: 2022-23	August 2022- July 2023	3,860	6,521
68th round (2011-12)	July 2011-June 2012	1,430	2,630
66th round (2009-10)	July 2009-June 2010	1,054	1,984

Table 4: Average MPCE (Rs.) at 2011-12 Prices (with imputation for 2022-23)

Survey	Period	Rural	Urban
HCES: 2022-23	August 2022- July 2023	2,054	3,544
68th round (2011-12)	July 2011-June 2012	1,430	2,630
66th round (2009-10)	July 2009-June 2010	1,238	2,359

Findings of the survey

The HCES data for 2022-23 indicates that:

1. The income levels of both Urban and Rural households have risen since the last survey, with Rural households showing a sharper growth in spending.
2. The average Monthly per capita consumption expenditure of both Urban and Rural households has doubled in the 11-year period with both spending less on food items.
3. Average MPCE for Rural households, without considering imputed or implicit values of items received free of cost through various social welfare programmes, rose from Rs 1,430 in 2011-12 to Rs 3,773 in 2022-23, a 163.85 % increase over the period;
4. Average MPCE for Urban households increased from Rs 2,630 in 2011-12 to Rs 6,459 in 2022-23, a 145.59 % increase over the period;
5. Of the total expenditure, 46% was spent on food items in Rural households and 39% in Urban homes in 2022-23;
6. Household spending increased 2.6 times in Rural areas and 2.5 times in Urban areas since the last survey in 2011-12;
7. The gap between Urban and Rural household consumption has narrowed, and Indian households have been spending more on non-food items;
8. While the bottom 5% of India’s Rural population has an average MPCE of Rs 1,441, the top 5% of India’s Rural population has an average MPCE of Rs 10,581, i.e., 7 times the MPCE of the bottom 5 % rural population.
9. While the bottom 5% of India’s Urban population has an average MPCE of Rs 2087, the top 5 % of India’s urban population has an average MPCE of Rs 20,846, i.e., 10 times the MPCE of the bottom 5 % Urban population.
10. The bottom 5% of India’s Rural population has an average MPCE of Rs 1,441 as compared to Rs 2,087 of the bottom 5 % of the Urban population, translating into a daily average consumption expenditure of Rs 48 in Rural areas and Rs 69.5 in Urban areas for the bottom 5%.
11. The top 5% of India’s Rural population, has an average MPCE of Rs 10,581 as compared to Rs 20,846 of the top 5 % of the Urban population, translating into a daily average spending of Rs 352.7 in Rural areas and Rs 694.8 in Urban areas for the top 5 %.

Inference

It can be inferred from the data presented in the survey that:

1. The difference between Rural and Urban MPCE has narrowed substantially over the years, implying the success of government policies in improving Rural incomes.
2. While the difference is more pronounced at the lower levels, the gap is bigger at the top, reflecting an increase in inequality at higher income levels.
3. The poorest Rural households have been able to spend at a much closer level to their Urban Counterparts, implying that the government’s policy initiatives for enhancing Rural incomes have worked to an extent.

DAIRY INDUSTRY FINDINGS Milk: Top food spend item in both rural and urban areas . Rural: Rs 314 per month Ahead of vegetables (Rs 203), cereals (Rs 185), egg, fish & meat (Rs 185), fruits (Rs 140), edible oil (Rs 136), spices (Rs 113), pulses (Rs 76). Urban: Rs 466 per month Ahead of fruits (Rs 246), vegetables (Rs 245), cereals (Rs 235), egg, fish & meat (Rs 231), edible oil (Rs 153), spices (Rs 138), pulses (Rs 90). Challenges for Dairy Industry Inflation: Rising milk prices (from Rs 42 to Rs 60 per litre in 5 years) may lead to demand destruction. Cost of Production: To raise farmer incomes without eroding domestic demand or global competitiveness, the cost of milk production must be reduced. Solutions for Cost Reduction Genetic Improvement: Increase milk yield per animal through new breeding technologies. Use of sex-sorted (SS) semen for higher probability (90%+) of female calves. Embryo Transfer (ET) Technology: Injecting follicle-stimulating hormone in cows to release multiple ova. Fertilising ova with semen from genetically-superior bulls and implanting them in recipient animals. Produces several calves from a single high genetic merit (HGM) cow. In Vitro Fertilisation (IVF): Extracting oocytes from cow's ovaries and fertilising them in vitro. Results in higher number of viable embryos per donor cow per year compared to normal breeding. Implementation by Amul Bovine Breeding Centre: Established for breeding HGM bulls and cows. IVF-ET Technology: Taken to farmers' doorstep, with successful pregnancies and calvings. Animal Nutrition: Focus on cultivating high-yielding protein-rich green fodder to reduce feeding costs Future Focus Lowering Production Costs: Focus of White Revolution 2.0 to reduce milk production costs at the farm-gate.

Epilogue

• The latest UNDP Report on the status ofmultidimensional poverty has highlighted the remarkable achievement of India on the social welfare front. Besides, the HCES indicating rise in income levels of both the Urban and Rural households since the last survey in 2011-12, with Rural households showing a sharper growth in spending along with, the NSO data indicating the increase in per capita income from Rs. 86,647 in 2014-15 to Rs 1.72 lakh in 2023 gives credence to the findings of the Household Consumption Expenditure Survey for 2022-23 released by the Ministry of Statistics and Programme Implementation, Government of India on 24^th of February, 2024.

White Revolution The White Revolution, also known as Operation Flood, was a successful dairy development program implemented in India. Here are the specifics: Initiation: The White Revolution was launched in 1970 by the National Dairy Development Board (NDDB) under the leadership of Dr. Verghese Kurien. Objective: The primary objective of the White Revolution was to make India self-sufficient in milk production and to enhance the livelihoods of millions of dairy farmers across the country. Implementation Strategy: The program focused on increasing milk production by promoting dairy cooperatives and modern dairy farming practices. It emphasized the establishment of cooperative milk unions at the district level, which would procure milk from farmers, process it, and market dairy products. The program also included initiatives to improve cattle breeds, enhance animal nutrition, and provide veterinary services to farmers. Impact: The White Revolution transformed India from a milk-deficient nation to the world's largest milk producer. It significantly increased milk production, leading to improved nutrition and economic prosperity for millions of rural dairy farmers. The program helped establish the famous brand "Amul" and other dairy cooperatives, which became models of success in the cooperative movement. How to bring White Revolution 2.0? Promotion of Technology Adoption: Encourage dairy farmers to adopt modern technologies such as artificial insemination, advanced breeding techniques, and digital solutions for herd management. Provide training and support to farmers to help them integrate these technologies into their farming practices. Value Addition: Promote the production of high-value dairy products such as cheese, yogurt, and flavored milk. Provide support for setting up dairy processing units and marketing these products effectively. Sustainable Practices: Encourage sustainable dairy farming practices, including efficient use of resources, waste management, and reducing the environmental impact of dairy production. Provide incentives for farmers who adopt sustainable practices. Market Linkages: Strengthen market linkages for dairy farmers by establishing direct procurement systems with dairy cooperatives or companies. Ensure fair prices for their produce and provide access to a wider market. Livelihood Improvement: Focus on improving the livelihoods of dairy farmers, especially women, by providing them with better access to markets, training, and support services. Empower them to become self-reliant and improve their standard of living. Government Support: The government can support White Revolution 2.0 through various schemes and initiatives, including financial assistance, training programs, and infrastructure development. Ensure that policies are farmer-centric and promote the growth of the dairy sector. Research and Development: Invest in research and development to develop new technologies and practices that can further improve the efficiency and sustainability of dairy farming. Collaborate with research institutions and private sector partners to drive innovation in the sector. Awareness and Education: Conduct awareness campaigns and educational programs to educate farmers about the benefits of modern dairy farming practices and the opportunities available in the dairy sector.

 

PRACTICE QUESTION Question: How does the Household Consumption Expenditure Survey (HCES) conducted in 2022-23 differ from earlier surveys? Choices: A) The 2022-23 survey included 405 questionnaire items compared to 347 in 2011-12, with separate questionnaires for food items, consumables and services, and durable goods. B) Unlike earlier surveys, the 2022-23 survey collected information on the quantity of consumption of items received free of cost through social welfare programmes. C) The 2022-23 survey continued the practice of imputing the value figures for consumption out of home-grown or produced stock, gifts, loans, and free collections. D) All of the above. Correct Answer: D) All of the above.