Consumer Expenditure Survey | Agriculture Optional Notes for UPSC PDF Download

Introduction

Between July 2017 and June 2018, the National Statistical Office (NSO) conducted the 75th round of the Household Consumption Expenditure Survey nationwide. This survey, typically conducted every five years, was last carried out in the 68th round during 2012-2013. The main objective of the Consumer Expenditure Survey (CES) was to gather information on household expenditures related to the consumption of diverse goods and services. Analyzing the data from this survey holds significant importance for GDP rebasing and making informed decisions about the production of goods and services.

Consumer Expenditure Survey

The National Sample Survey Office (NSSO) under the Government of India conducts the Consumer Expenditure Survey (CES) every five years. This survey aims to collect information about the spending habits of both rural and urban households on goods and services. It provides insights into the average expenditures on various items, encompassing both food and non-food products. Additionally, the survey assists in estimating the Monthly Per Capita Consumer Expenditure (MPCE) of households and the distribution across different MPCE classes. The data obtained from this survey is crucial for producers to assess the market and formulate production plans for goods and services.

Consumer Expenditure Survey 2011-2012

In the Consumer Expenditure Survey (CES) of 2011-12:

• The average Monthly Per Capita Consumer Expenditure (MPCE) in urban areas was Rs. 2,630, while in rural areas, it was Rs. 1,430.
• Rural spending on cereals, rent, and education constituted 10.8%, 0.5%, and 3.5%, respectively.
• Urban spending on cereals, rent, and education accounted for 6.7%, 6.2%, and 7%, respectively.
• Food expenditure comprised 53% of the average consumption expenses in rural Indian households and 42.6% in urban households.

Consumer Expenditure Survey 2017-2018

The most recent Consumer Expenditure Survey took place from 2017 to 2018. However, due to identified discrepancies in the sample data, the government chose not to release the survey results for that period. In response, the government has implemented improvements to the data quality in the consumer expenditure survey process. This marks the first instance of canceling a survey of such significance by the National Statistical Office (NSO). Originally established as the National Sample Survey Office (NSSO) in 1950, the NSO's decision to not use the 2017-2018 data as a new base year was also recommended by the Advisory Committee. The discontinuation of the CES for 2017-18 has implications, including a delay in incorporating vital statistics and deviation from the standards set by the International Monetary Fund (IMF).

Why was CES 2017-2018 junked?

• Due to concerns about data quality, the government opted not to make the Consumer Expenditure Survey (CES) data reports publicly available. Media reports on the CES surveys conducted by the NSS indicated a decline in consumer spending. Upon scrutinizing the survey data, the government identified substantial disparities in consumption-pattern levels and the direction of change, inconsistent with other administrative data sources on the production of goods and services.
• Between 2011 and 2012, the average monthly expenditure per person decreased from Rs. 1,501 to Rs. 1,446 in 2017-2018, marking a 3.7% decline. 
  • This led to questions about the survey instrument's sensitivity to capture the consumption of social services like education and health by households.
• In response to these concerns, a committee of experts was established to investigate the matter, resulting in several recommendations to enhance data quality in future Consumer Expenditure Surveys.

Next Consumer Expenditure Survey 

Access to Consumer Expenditure Survey (CES) data is imperative for policymakers. With the non-publication of CES data in 2017-18, policymakers faced challenges in adapting existing policies and formulating new ones. The subsequent CES is scheduled for 2022-2023, spanning from July 2022 to June 2023. It will provide government and non-government organizations with data on household consumption and expenditure, marking a gap of 9 or 10 years since the 2011-12 round. To prepare for the upcoming survey, field enumerators will undergo the necessary training starting in mid-May 2022.

Conclusion

The National Sample Survey Office (NSSO) has been conducting the Consumer Expenditure Survey every five years since 1972. This survey is pivotal in evaluating the evolving demand patterns and changing priorities of consumers, encompassing both rural and urban areas. Additionally, it aids in assessing living standards and economic growth trends across different levels. The data from the survey provides valuable insights for policymakers to identify anomalies in policies that might impact shifting demand, allowing them to formulate appropriate strategies for the production of goods and services.