Consumer Expenditure Survey

From July 2017 to June 2018, the NSO (National Statistical Office) conducted a Household Consumption Expenditure Survey throughout the country in the 75th round. The Consumer Expenditure Survey is usually carried out every 5 years. Before 2017-2018, the CES was conducted in 2012-2013 in the 68th round. The CES survey was designed to collect data regarding expenditure on the consumption of various goods and services by households. The results of this data analysis are crucial for GDP rebasing and taking decisions on the production of goods and services. 

What is the Consumer Expenditure Survey?

The Consumer Expenditure Survey (CES) is a survey carried out by the NSSO (National Sample Survey Office) of the Government of India. The survey is conducted once every five years to gather data on the spending pattern of the households, both rural and urban, in the consumption of goods and services. The data gathered in this survey indicates the average expenditure of households on various goods and services. The goods include both food and non-food items. The survey data also helps estimate the household MPCE (Monthly Per Capita Consumer Expenditure) and the distribution of households and people in different MPCE classes. This data is important for the producers to assess the market and make plans for the production of goods and services. 

Consumer Expenditure Survey 2011-2012

Some of the findings of CES 2011-12 are:

• The average urban MPCE was Rs. 2,630, and the average rural MPCE was Rs. 1,430. 
• The spending on cereals, rent, and education in the rural region was 10.8%, 0.5%, and 3.5%, respectively. The spending on cereals, rent, and education in the urban region was 6.7%, 6.2%, and 7%, respectively.
• The food expenditure in the rural Indian household was 53%, and the urban household was 42.6% of average consumption expenses. 

Consumer Expenditure Survey 2017-2018

The Consumer Expenditure Survey was last conducted from 2017 to 2018. After some discrepancies were observed in the sample data, the government did not release the data of the consumer expenditure survey 2017-28. The government has incorporated the data quality refinements in the consumer expenditure survey process for improving the data quality. This is the first time an NSO (National Statistical Office) Survey of such an important level was scrapped. NSO was initially formed as NSSO (National Sample Survey Office) in 1950. There was a separate recommendation by the Advisory Committee for not using 2017-2018 as a new base year. Scrapping of CES 2017-18 means a delay in incorporating the key statistics. It is also against the IMF’s standards. 

Why was CES 2017-2018 junked?

Due to the data quality issues, the government decided not to release the CES data reports in the public domain. Some observations were made in the media reports regarding the CES surveys conducted by NSS. It indicated that consumer spending is declining. Due to the adverse findings in these draft reports, the government examined the survey data and noticed that there is a huge divergence in the consumption-pattern levels and the direction of the change. These changes did not match with the other administrative data collected, such as the data on the production of goods and services. 

• From 2011 to 2012, the average amount of money spent by a person per month was Rs. 1,501, which became Rs. 1,446 during the period 2017-2018, i.e. it decreased by 3.7%. 

After going through the data, questions were raised about the survey instrument’s sensitivity or ability to capture the consumption of social services such as education, health etc., by a household. 

Out of these concerns, a committee of experts was set up to look into it, and many recommendations were suggested for improving the data quality in the next CES. 

Next Consumer Expenditure Survey 

The Consumer expenditure data is crucial for the policymakers. As the CES data was not made public in 2017-18, the policymakers found it difficult to incorporate changes in the existing policies and make new news. The next Consumer Expenditure Survey will be conducted in 2022-2023. It will start in July 2022 and end in June 2023. The government and non-government organizations will get data regarding household consumption and expenditure after 9 or 10 years after the 2011-12 round. The field enumerators for the upcoming Consumer Expenditure Survey will be provided required training from the middle of May 2022. 

Conclusion

Since 1972, the National Sample Survey Office (NSSO) has been conducting a Consumer Expenditure Survey once every five years. The survey plays a crucial role in assessing the demand dynamics and shifting of consumers’ priorities, both rural and urban. It is also helpful in assessing the living standards and the trends of economic growth at various levels. The survey data helps the policymakers to address any anomaly in the policies which may affect the shifting of demand so the right strategies can be taken regarding the production of goods and services.