Centre discloses data of per capita monthly household consumption expenditure after 11-year gap

The gap 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, as per the latest Household Consumption Expenditure Survey (HCES) 2022-23 published on Saturday February 24 by the Ministry of Statistics and Programme Implementation (MoSPI).

The data indicates that rural consumption spending has increased more than urban spending in the past 11 years. The report shows that rural average monthly consumption spending per person rose to Rs 3,773 per month in 2022-23 from Rs 1,430 per person in 2011-12, a surge of 164 per cent, outpacing the 146 per cent increase in urban average monthly consumption expenditure per person to Rs 6,459 in 2022-23 from Rs 2,630 per person in 2011-12.

Despite the five-year interval for Household Consumption Expenditure surveys, the government did not publish the results of its 75th round for July 2017-June 2018, citing significant variations in consumption patterns and direction of change. The unreleased survey reportedly indicated a drop in consumption expenditure.

The Household Consumer Expenditure Survey (HCES) factsheet revealed that the average Monthly Per Capita Expenditure (MPCE) for the lowest 5 per cent of the rural population is Rs 1,373, and for the same percentile in urban areas, it is Rs 2,001. For the top 5 per cent of the population in these areas, the MPCE stands at Rs 10,501 and Rs 20,824 respectively.

This means the top 5 per cent of the rural population spends 7.65 times more than the bottom 5 per cent, and in urban areas, this ratio is over 10. In the financial year 2022-23, the expenditure on food was 46 per cent of total spending in rural areas and 39 per cent in urban areas. This is a decrease from 2011-12 when it was 52.90 per cent and 42.62 per cent respectively.

This could potentially impact the consumer price index-based inflation. Non-food expenditure, which includes spending on conveyance, consumer services, and durable goods, increased to 54 per cent in rural India and 61 per cent in urban India in 2022-23, from 2011-12. Meanwhile, spending on cereals, pulses, and vegetables saw a reduction in the same period.

The survey report incorporating the estimated cost of food grains and other complimentary items distributed under government schemes reveals that the average monthly consumption expenditure is Rs 3,860 in rural areas and Rs 6,521 in urban areas. This indicates an increase of Rs 87 in rural and Rs 62 in urban areas compared to expenditure excluding the value of free items.

With the estimated value of free items, the bottom 5 per cent of India’s rural population spends about Rs 1,441, marginally higher than Rs 1,373 spent without considering the free items. For urban areas, the consumption expenditure for the same percentile stands at Rs 2,001 without the estimated value of free items and Rs 2,087 with it.

The Household Consumption Expenditure Survey (HCES) collects data on household consumption of goods and services. The latest survey results have been released after an interval of over 10 years, following the government's decision to discard the 2017-18 survey due to leaked results indicating a decrease in consumption.

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