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Indian Economy

Household Consumer Expenditure Survey

  • 25 Apr 2022
  • 3 min read

For Prelims: Household Consumer Expenditure Survey, NSSO, NSO

For Mains: Significance of conducting Household Consumer Expenditure Survey

Why in News?

The All-India Household Consumer Expenditure Survey is set to resume this year (2022) after a prolonged break.

  • The results will include separate data sets for rural and urban parts, and splice spending patterns for each State and Union Territory, as well as different socio–economic groups.

Why has the Government Stopped Conducting the Survey?

  • The government had discontinued the findings of the last Survey, conducted in 2017–18, citing “data quality” issues.
    • In 2019, the government had dismissed reports that the 2017–18 Survey findings were being withheld due to adverse outcomes reflecting a decline in consumer spending.
  • It was also noted that there was a significant increase in the divergence in not only the levels in the consumption pattern but also the direction of the change when compared to the other administrative data sources like the actual production of goods and services.
  • There were also concerns about the “ability/sensitivity of the survey instrument to capture consumption of social services by households especially on health and education.

What is a Household Consumer Spending Survey?

  • Time Interval:
  • Scope:
    • Collects information on the consumption spending patterns of households across the country, both urban and rural.
  • Information Generated:
    • Reveals the average expenditure on goods (food and non-food) and services.
    • Helps generate estimates of household Monthly Per Capita Consumer Expenditure (MPCE) as well as the distribution of households and persons over the MPCE classes.
  • Significance in General:
    • Helps in calculating the demand dynamics of the economy.
    • Helps in understanding the shifting priorities in terms of baskets of goods and services, thus providing pointers to the producers of goods and providers of services.
    • To assess living standards and growth trends across multiple strata.
  • Significance for Policymakers:
    • The CES is an analytical as well as a forecasting tool which helps the Government in planning required interventions and policies.
    • 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.
    • To rebase the Gross Domestic Product (GDP) and other macro-economic indicators.

Source: TH

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