Consumer Expenditure Survey Released

[GS Paper 3 – Indian Economy, Govt. Policies and Interventions]

Context – The Narendra Modi government is set to launch a new household consumer expenditure survey (CES) from July. The exercise is long overdue. The CES, covering some 1.2 lakh rural and 84,000 urban households, is supposed to be conducted every five years.

Key Developments

• The last two such nationwide sample surveys were carried out in 2011-12 and 2017-18. Unfortunately, the results of the 2017-18 survey were not released on grounds of unexplained “data quality issues”.

• According to a leaked version of the 2017-18 survey, the country has witnessed the first such drop in the Monthly Per Capita Consumer Expenditure (MPCE) since 1972-73. Previous survey on consumer expenditure was conducted during the period : July 2011 to June 2012.
• The Survey is conducted every five years by the National Sample Survey Office (NSSO). It collects information on the consumption spending patterns of households across the country, both rural and urban.

• The Survey reveals the average expenditure on Goods (foods and non-foods) and Services. It helps generate the estimates of household Monthly Per Capita Consumer Expenditure (MPCE) as well as the distribution of households and persons over the MPCE classes.

Significance of the Survey

• It helps in calculating the demand dynamics of the economy and understanding the shifting priorities in terms of baskets of goods and services, thus providing pointers to the producers of goods and providers of services.

• It also helps to assess living standards and growth trends across multiple strata.

• The CES is an analytical as well as a forecasting tool which helps the Government in planning required interventions and policies.

• The Survey tries to spot and address possible structural anomalies that may cause demand to shift in a particular manner in a specific socio-economic or regional division of the population and to rebase the Gross Domestic Product (GDP) and other macro-economic indicators.

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