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Consumption growth may have slowed but not declined: Report

The Indian Human Development Survey (IHDS) that was quoted in the report points out that while per capita consumption growth for the period between 2004-05 and 2011-12 stood at 4 percent, the same was at around 2.7 percent for the period between 2011-12 and 2017-18.

January 27, 2020 / 08:41 PM IST

The Statistics and Programme Implementation Ministry (MOSPI) on November 15 said it has decided not to release the Consumer Expenditure Survey results of 2017-18 due to data quality issues.

According to several reports that cited leaked portions of the NSS data for 2017-18, consumption expenditure saw a decline in absolute terms for the period 2011-12 to 2017-18.

However, a recent study suggests that contrary to the NSS data, consumption expenditure has in fact grown for the said period, Mint reports. However, the study does point out that the growth has taken place at a lower pace.

The Indian Human Development Survey (IHDS) that was quoted in the report points out that while per capita consumption growth for the period between 2004-05 and 2011-12 stood at 4 percent, the same was at around 2.7 percent for the period between 2011-12 and 2017-18.

The report noted that interpretation of consumption expenditure data in this period is difficult due to effects of the demonetisation exercise.

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It acknowledged that the sudden cash crunch in the Indian economy following demonetisation in 2016 severely restricted the purchasing power of individuals and small businesses. But it does point out that the effect of such shock factors, was only temporary in nature.

The report also noted the authors of the study highlighted that the scope of the survey is limited. This was due to several factors. For one, only 81 percent of the households that were interviewed in 2004-5 could be contacted for follow-ups to the survey. More urban households were unavailable for the follow-up than the rural households, which meant that the sample size was even more selective.

The basket of consumption items was also smaller in comparison to the NSS survey. Where the NSS collects data on 500 items, the IHDS survey only collected data on 52 items.
Moneycontrol News
first published: Jan 27, 2020 08:41 pm

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