In News:

• The All-India Household Consumer Expenditure Survey is set to resume this year after a prolonged break.
  
  
• The survey is conducted by the National Statistical Office (NSO) usually every five years.
  
  

What’s in Today’s Article:

• Consumer Expenditure Survey - About, Significance, Key Findings from 2011-12, background
  
  
• News Summary
  
  

In Focus: Consumer Expenditure Survey (CES)

About

• The CES is traditionally a quinquennial (recurring every five years) survey conducted by the government’s National Statistical Office (NSO).
  
  
• It is designed to collect information on the consumption spending patterns of households across the country, both urban and rural.
  
  
• The data gathered in this exercise reveals the average expenditure on goods (food and non-food) and services.
  
  
• It 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

• Vital in gauging the demand dynamics
  • The estimates of monthly per capita consumption spending are important in measuring the demand dynamics of the economy.
    
    
  • It is also useful for understanding the shifting priorities in terms of baskets of goods and services.
    
    
  
  
  
• Assessment of growth trends across different strata
  • It is helpful in assessing living standards and growth trends across multiple strata.
    
    
  
  
  
• Invaluable analytic and forecasting tool
  • The CES is an invaluable analytical as well as forecasting tool.
    • It helps policymakers spot and address possible structural anomalies that may cause demand to shift in a particular manner.
      
      
    • It provides pointers to producers of goods and providers of services.
      
      
    
    
    
  • It is used by the government in rebasing the GDP and other macro-economic indicators.
    
    
  
  
  

Key Findings of Consumer Expenditure Survey 2011-12

• The survey showed that average urban MPCE (at ₹2,630) was about 84% higher than average rural MPCE (₹1,430) for the country as a whole.
  
  
• Food accounted for about 53% of the value of the average rural Indian household’s consumption during 2011-12.
  • In the case of urban households, it accounted for only 42.6% of the average consumption budget.
    
    
  
  
  
• While education accounted for 3.5% of the rural household’s average spending, an urban household spent almost 7% of its monthly consumption budget on it.
  
  
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Background

• The last survey on consumer expenditure was conducted in the NSS 68th round (July 2011 to June 2012).[In May 2019, Indian government passed the order to merge the National Sample Survey Office (NSSO) with the Central Statistics Office (CSO) to form the National Statistical Office (NSO)]
  • This is because the government had junked the findings of the Survey, conducted in 2017–18, citing data quality issues.
    
    
  
  
  
• In November 2019, the Statistics and Programme Implementation Ministry said it was examining the feasibility of conducting the next Survey in 2020–2021 and 2021–22.
  • This was to be done after incorporating all data quality refinements in the survey process, as recommended by an expert panel.
    
    
  • The expert panel had vetted the discrepancies in the 2017–18 results and recommended certain changes.
    
    
  
  
  
• However, the Survey could not be launched in the last two years due to the pandemic.
  
  
• Finally, a decision has been taken to conduct the Survey from July 2022.
  • The government has begun planning exercises to train the enumerators who will carry out the 2022–23 Survey on the ground.
    
    
  
  
  

News Summary

• The All-India Household Consumer Expenditure Survey is set to resume this year from July.
  
  

Why the government is resuming the survey?

• Since 2011-12, India hasn’t had any official estimates on
  • per capita household spending, used to arrive at estimates of poverty levels in different parts of the country and
    
    
  • to review economic indicators like the Gross Domestic Product (GDP), the estimates of monthly per capita consumption spending etc.
    
    
  
  
  
• India is obliged to follow good practices in four areas in disseminating macroeconomic statistics to the public. These comprise:
  • Coverage, periodicity, and timeliness of data; public access to those data; data integrity; and data quality.
    • India is a subscriber to the IMF’s Special Data Dissemination Standard which requires India to follow these obligations.
      
      
    • The IMF’s ‘Annual Observance Report’ for 2018 had flagged concerns about India’s delays in releasing economic data.
      
      
    
    
    
  
  
  

The government had rejected the survey data obtained in 2017–18

• The government had questioned the quality of the data obtained in the last survey.
  
  
• As per the government, there was a significant increase in the divergence in the levels in the consumption pattern.
  
  
• Also, divergence was noticed in 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 of the survey instrument to capture consumption of social services by households especially on health and education.