Key Indicators of Household Consumer Expenditure in India, 2011-12

The National Sample Survey Office (NSSO), Ministry of Statistics and Programme Implementation has released the key indicators of household consumer expenditure in India, generated from the data collected during July 2011–June 2012 in its 68^th round survey. NSS surveys on consumer expenditure are conducted quinquenniallystarting from 27^th round (October 1972 – September 1973) and the last quinquennial survey was conducted in NSS 66^th round (July 2009 – June 2010), for which the results have already been released.  The NSS 68^th round was the ninth quinquennial round on the subject.

           

The NSS consumer expenditure survey aims at generating estimates of household monthly per capita expenditure (MPCE) and its distribution, separately for the rural and urban sectors of the country, for States and Union Territories, and for different socio-economic groups.  These indicators are amongst the most important measures of the level of living of the respective domains of the population and are crucial inputs for estimation of prevalence of poverty by the Planning Commission.  The detailed results of a quinquennial survey on consumer expenditure are usually brought out by the NSSO through a number of reports.  In order to make available the salient results of the survey well in advance of the release of its reports, for use in planning, policy formulation,decision support and as input for further statistical exercises, the NSSO has released the key indicators.

           

The key indicators are based on the Central Sample consisting of 7,469 villages in rural areas and 5,268 urban blocks spread over all States and Union Territories except in (i) interior villages of Nagaland situated beyond five kilometres of a bus route and (ii) villages in Andaman and Nicobar Islands which remain inaccessible throughout the year.

           

In the 68^th round consumer expenditure survey, two types of schedules of enquiry – Schedule 1.0 Type 1 and Schedule 1.0 Type 2 – were used to collect data on household consumption, each in about half of the sample households.  The schedules differed only in reference periods (recall periods for reporting consumption). It is a known fact that using a different reference period alters the estimate of consumption obtained. The differences between the schedules are summarised as follows:

Reference periods used for collection of consumption data in Schedule 1.0
Cate-gory	Item groups	Reference period for
		Schedule Type 1	Schedule Type 2
I	Clothing, bedding, footwear, education, medical (institutional), durable goods	‘Last 30 days’ and ‘Last 365 days’	Last 365 days
II	Edible oil; egg, fish & meat; vegetables, fruits, spices, beverages and processed foods; pan, tobacco & intoxicants	Last 30 days	Last 7 days
III	All other food, fuel and light, miscellaneous goods and services including non-institutional medical; rents and taxes	Last 30 days	Last 30 days

            From each sample household where Schedule Type 1 was canvassed, there are two possible ways of measuring household MPCE: one using “last 30 days” for all items, and the other using “last 365 days” data for Category I items and “last 30 days” for the rest. The first measure of MPCE is called MPCE_URP (Uniform Reference Period MPCE) and the second, MPCE_MRP (Mixed Reference Period MPCE). From the data collected through Schedule Type 1, therefore, two alternative estimates of distribution of MPCE and average MPCE can be built up.

Using the data collected through Schedule Type 2, a third estimate of distribution of MPCE and average MPCE can be built up. Since the reference period system used for Schedule Type 2 was only a slight modification of the Mixed Reference Period (differing only in the reference period used for Category II items), this measure of MPCE was called the MPCE_MMRP (Modified Mixed Reference Period MPCE).

            The values of all-India average MPCE according to the three different measurement methods from NSS 66^th and 68^th rounds are given below:

Average MPCE (Rs.)
NSS Round	MPCEURP		MPCEMRP		MPCEMMRP
	Rural	Urban	Rural	Urban	Rural	Urban
66th (2009-10)	927.70	1785.81	953.05	1856.01	1053.04	1984.46
68th (2011-12)	1278.94	2399.24	1287.17	2477.02	1429.96	2629.65

The estimates of average MPCE and its break-up over groups of consumption items – 14 food groups and 16 non-food groups – are provided separately for rural and urban sectors at the State/UT level as well as across all-India fractile classes of MPCE. The fractile classes are mostly decile classes. Thus, the first decile class comprises the bottom 10 percent of population in terms of MPCE and the top (10^th) decile class comprises the top 10 percent of population. However, the first and 10^th decile classes have each been further split into two equal-sized fractileclasses. Estimates of distribution of rural and urban population of each State/UT over 12 MPCE classes as well as State/UT-level fractiles (limits of fractile classes formed at State/UT level) are also provided,

 

             Some salient  findings of the survey relating to monthly per capita expenditure (MPCE) based on modified mixed reference period (MMRP)  are as follows:

·         The all-India estimate of average MPCE was around Rs.1430 for rural India and about Rs.2630 for urban India. Thus average urban MPCE was about 84% higher than average rural MPCE for the country as a whole, though there were wide variations in this differential across States.

·         For rural India, the 5^th percentile of the MPCE distribution was estimated as Rs.616 and the 10^th percentile as Rs.710. The median MPCE was Rs.1198. Only about 10% of the rural population reported household MPCE above Rs.2296 and only 5% reported MPCE above Rs.2886.

·         For urban India, the 5^th percentile of the MPCE distribution was Rs.827 and the 10^th percentile, Rs.983. The median MPCE was Rs.2019. Only about 10% of the urban population reported household MPCE above Rs.4610 and only 5% reported MPCE above Rs.6383.

·         For the average rural Indian, food accounted for 52.9% of the value of consumption during 2011-12. This included 10.8% for cereals and cereal substitutes, 8% for milk and milk products, 7.9% on beverages, refreshments and processed food, and 6.6% on vegetables. Among non-food item categories, fuel and light for household purposes (excluding transportation) accounted for 8%, clothing and footwear for 7%, medical expenses for 6.7%, education for 3.5%, conveyance for 4.2%, other consumer services (excl. conveyance)for 4%, and consumer durables for 4.5%.

·         For the average urban Indian, 42.6% of the value of household consumption was accounted for by food, including 9% by beverages, refreshments and processed food, 7% by milk and milk products, and 6.7% by cereals and cereal substitutes. Education accounted for 6.9%, fuel and light for 6.7%, conveyance  for6.5%, and clothing &  footwear  for 6.4%.

Average MPCE_MMRP across fractile classes of MPCE_MMRP, at  all-India level for rural and urban areasduring 2011-12 is given in Annexure-I. Absolute and percentage break-up of MPCE_MMRP at  all-India level for rural and urban areas during 2011-12 is given at Annexure –II. Trends in percentage composition of MPCE_URPsince 1993-94 for rural and urban sectors of India are given in Annexure III.

Click here to see Annexure.