India’s per capita monthly consumption expenditure saw a significant increase of 33-40 percent in the period 2022-23 compared to 2011-12, according to the latest findings from the government’s Household Consumer Expenditure Survey released on February 24.
The survey revealed that rural areas experienced a 40 percent rise in per capita monthly consumption to Rs 2,008, while urban areas saw a 33 percent increase 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, while India’s real GDP grew by an average of 5.7 percent annually during the same period.
This survey is the first of two consecutive Consumer Expenditure Surveys conducted by the statistics ministry, with the second survey currently underway for the 12 months starting August 2023. The data collected is vital for updating the Consumer Price Index (CPI) and headline inflation rate, which are still based on consumption patterns from the 2011-12 survey.
Notably, a previous survey conducted in 2017-18 was controversially discarded by the government due to concerns about data quality. Consequently, India’s CPI inflation data remained unchanged.
The latest survey covered 2.62 lakh households, with data categorized into food items, consumables and service items, and durable goods. A total of 405 items were included, an increase from the 347 items in the 2011-12 survey.
An important addition to the current survey is the inclusion of data on items received free through social welfare schemes. These items were imputed with a value, leading to an increase in average monthly per capita consumption expenditure in 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 will only be possible after the completion of the second survey in July this year. This will pave the way for a comprehensive overhaul of the inflation series based on updated consumption patterns.
