Last week, the Ministry of Statistics & Programme Implementation (MoSPI) launched the factsheet of the Household Consumption Expenditure Survey (HCES) for the yr 2023-24. The survey was undertaken consecutively after the 2022–23 examine. Back-to-back surveys have been essential to seize sequential consumption tendencies, making certain methodological consistency and information reliability. This strategy facilitates the recalibration of base years for macroeconomic metrics and offers policymakers with a extra granular understanding of family expenditure dynamics to tell evidence-based financial planning.
The information has some attention-grabbing findings. The common month-to-month per capita expenditure (MPCE) has been estimated at ₹4,122 in rural areas and ₹6,996 in city areas, rising to ₹4,247 and ₹7,078, respectively, when accounting for the imputed worth of things offered via social welfare programmes. Both rural and concrete MPCEs have elevated nominally by roughly 9% and eight%, respectively, from 2022-23 ranges, reflecting an general rise in consumption. Importantly, the urban-rural MPCE hole has narrowed considerably, falling to 70% in 2023-24 from 84% in 2011-12, suggesting a sustained consumption development in rural areas. Additionally, probably the most important improve in MPCE has been noticed among the many backside 5-10% of the inhabitants in each city and rural areas, highlighting improved spending capability amongst lower-income teams.
The findings point out a big shift in family expenditure patterns, with non-food gadgets constituting 53% of rural and 60% of city family spending. This marks a notable development of diversified spending and a transfer away from food-dominated expenditure. An EAC-PM paper by Mudit Kapoor et al., primarily based on the unit-level information of HCES 2022-23 (unit-level information of HCES 2023-24 can be out there in just a few months), additionally factors to this development. For the primary time since independence, the typical family spending on meals has fallen under 50% of general month-to-month expenditures. The findings align with Engel’s Law, which posits that as family revenue will increase, the proportion of revenue spent on meals declines, even when absolute spending on meals rises.
Within meals classes, cereal expenditure has declined markedly, particularly among the many backside 20% of households in rural and concrete areas, probably reflecting the effectiveness of presidency meals safety initiatives, resembling free foodgrain distribution. These tendencies have essential implications for agriculture and vitamin insurance policies. There is now a necessity to advertise various meals manufacturing, resembling fruits, greens, and animal-source meals.
Further, key non-food expenditure classes embody conveyance, clothes, sturdy items, and leisure. In meals expenditure, drinks, refreshments, and processed meals dominate, indicating evolving consumption preferences. Rent contributes 7% to city family non-food spending, underscoring the rising significance of housing prices. Notably, consumption inequality has declined, with the Gini coefficient dropping to 0.237 for rural areas and 0.284 for city areas from their 2022-23 ranges. These tendencies suggest a optimistic trajectory in bridging financial disparities and enhancing residing requirements throughout India, pushed by sturdy social welfare interventions and broad-based financial development.
However, how are the states performing? Several many years in the past, demographer Ashish Bose coined the time period BIMARU, an acronym for the states of Bihar, Madhya Pradesh, Rajasthan, and Uttar Pradesh (as they existed earlier than subsequent divisions). The time period, launched within the Nineteen Eighties in a paper offered to then Prime Minister Rajiv Gandhi, phonetically resembles the Hindi phrase ‘bimaar’ and served as a stark metaphor for the developmental challenges these states represented. Over time, the acronym was expanded to incorporate Odisha, forming BIMAROU. These states collectively symbolised most of the structural points that hindered India’s progress, resembling stagnant financial development, insufficient infrastructure, poor social indicators, and protracted poverty.
The socio-economic trajectories of those states stay central to India’s general growth, given their substantial inhabitants and important share of the nation’s poverty base. With hundreds of thousands residing under the poverty line, the efficiency of the BIMAROU states is essential for nationwide poverty discount, employment era, and financial development. Their growth immediately impacts India’s general metrics for poverty alleviation and human growth.
If one seems on the consumption patterns in these states, one will discover that whereas there are huge enhancements as in comparison with HCES 2011-12 and even HCES 2022-23, they nonetheless have lowest HCES; in some circumstances, it’s decrease than the nationwide common MPCE. Bihar and Uttar Pradesh report the bottom rural MPCE at ₹3,788 and ₹3,578, and concrete MPCE at ₹5,165 and ₹5,474. Madhya Pradesh (₹3,522 rural, ₹5,589 city) and Odisha (₹3,509 rural, ₹5,925 city) present barely higher figures however nonetheless fall under the nationwide common. Rajasthan fares comparatively higher with ₹4,626 rural and ₹6,640 city MPCE however stays behind extra developed states.
Overall, among the many giant states, Chhattisgarh recorded the bottom rural MPCE at ₹2,927, adopted by Jharkhand (₹3,056) and Uttar Pradesh (₹3,578). In city areas, Chhattisgarh additionally had the bottom MPCE at ₹5,114, with Bihar (₹5,165) and Jharkhand (₹5,455) shut behind.
When analysing the nationwide common Monthly Per Capita Expenditure (MPCE) for rural areas, which stands at ₹4,122, a number of main states fall under this benchmark. These embody West Bengal (₹3,620), Assam (₹3,793), Bihar (₹3,670), Madhya Pradesh (₹3,441), Uttar Pradesh (₹3,481), Odisha (₹3,357), Jharkhand (₹2,946), and Chhattisgarh (₹2,739).
Similarly, for city areas, the place the nationwide common MPCE is ₹6,996, a big variety of states additionally lag behind. These states embody Assam (₹6,794), Rajasthan (₹6,574), Odisha (₹5,825), West Bengal (₹5,775), Madhya Pradesh (₹5,538), Uttar Pradesh (₹5,395), Jharkhand (₹5,393), Bihar (₹5,080), and Chhattisgarh (₹4,927).
This could have a bearing on the poverty numbers. The HCES offers detailed insights into family consumption patterns, and making use of this information to a revised poverty line may give a extra correct measure of deprivation within the nation. Since unit-level information can be out there quickly, it will likely be the correct time to evaluation the prevailing metrics, resembling the patron worth index, and it’ll even be a chance to provide you with a brand new poverty line. Also, as information exhibits, poverty alleviation interventions ought to now focus extra on states like Jharkhand and Chhattisgarh other than the same old states the place MPCE continues to be considerably decrease than the nationwide common.
(Aditya Sinha is a public coverage skilled.)
Disclaimer: These are the non-public opinions of the creator