Charticle: Key takeaways from India's household consumption expenditure survey

The Household Consumer Expenditure Survey is crucial to updating the Consumer Price Index and the resultant headline inflation rate, which is currently based on the consumption patterns from 2011-12.

India's fact sheet on the latest Household Consumer Expenditure Survey on February 24 revealed that rural households are spending more than their urban counterpart.

Moneycontrol lists out the key takeaways from the survey in charts:

Per capita monthly consumption in rural areas was 40 percent higher in 2022-23 at Rs 2,008, while it was up 33 percent in urban areas at Rs 3,510 after adjusting for inflation. This represents an average annual growth of 3.1 percent for rural per capita consumption and 2.7 percent for its urban counterpart. Over the same period, India's real GDP has grown by 5.7 percent on average each year.

This shows that the gap between rural and urban consumption as per the 2011-12 survey was at Rs 1,200, while it widened to Rs 2,686 in 2022-23.

The share of food in total monthly per capita consumption expenditure (MPCE) is 39 percent and that of non-food categories is 61 percent.

The weight of food items in the MPCE fell to 46.38 percent in 2022-23 for rural India from 52.90 percent in 2011-12 and to 39.17 percent for urban India from 42.62 percent in 2011-12.

In the rural food basket, the percentage of MPCE spent on cereals more than halved to 4.89 percent in 2022-23 from 10.69 percent in 2011-12. Meanwhile, the share of consumption expenditure on milk and milk products has gone up slightly, while that of vegetables edged down.

In Urban India, spending on cereals is down sharply, while that on milk and milk products went up.

The survey provides a sneak peek into the consumption patterns of key social groups. While the average MPCE for scheduled tribes in rural areas is the lowest, in urban areas spending by those belonging to the scheduled caste category is the least.

While the share of food in MPCE is falling, the share of durable goods and conveyance – both in rural and urban India, has seen the biggest jump in 2022-23.