Why in the News?

The Household Consumption Expenditure Survey (HCES) 2023-24 highlights key trends in consumption patterns across India. It is conducted by the National Statistical Office (NSO) every 5 years.

Important Highlights of HCES, 2023-24:

• Rural Spending: Monthly per capita consumption expenditure (MPCE) increased by 9.3% to ₹4,122 in 2023-24 (from ₹3,773 in 2022-23); significantly higher than ₹1,430 in 2011-12.
• Urban Spending: MPCE rose by 8.3% to ₹6,996 (from ₹6,459 in 2022-23); up from ₹2,630 in 2011-12.
• Rural-Urban Gap: Narrowed to 69.7% in 2023-24, compared to 71.2% in 2022-23 and 83.9% in 2011-12.
• Food Expenditure: Share increased to 47.04% in rural and 39.68% in urban households, reversing a decades-long decline.
  • Rural households spent most on beverages and processed food (11.09%), followed by milk products (8.44%) and vegetables (6.03%).
  • Urban households spent most on beverages and processed food (9.84%), milk products (7.19%), and vegetables (4.12%).
  • Decline in expenditure on sugar and salt, with rising spending on beverages and processed foods, signaling dietary shifts.
• Non-Food Expenditure: Accounted for the majority in both rural (52.96%) and urban areas (60.32%).
  • Major rural non-food expenses: Conveyance (7.59%), medical expenses (6.83%), and clothing & bedding (6.63%).
  • Major urban non-food expenses: Conveyance (8.46%), entertainment (6.92%), and durable goods (6.87%).
    – Regional Variations:
• Highest MPCE: Sikkim (Rural – ₹9,377; Urban – ₹13,927) and Chandigarh (Rural – ₹8,857; Urban – ₹13,425).
• Lowest MPCE: Chhattisgarh (Rural – ₹2,739; Urban – ₹4,927).
• States with largest rural-urban gaps: Meghalaya (104%), Jharkhand (83%), and Chhattisgarh (80%).
• Consumption Inequality: Gini coefficient declined from 0.266 to 0.237 in rural areas and 0.314 to 0.284 in urban areas, indicating reduced income disparity.

Features and Significance

• Consumption Trends: Indicates rising food expenditure driven by inflation and evolving post-pandemic behaviors.
• Narrowing Rural-Urban Gap: Highlights improved rural consumption growth outpacing urban areas.
• Changing Diet Patterns: Increased preference for beverages and processed foods in both rural and urban households reflects dietary shifts.
• Regional Disparities: Offers insights into high- and low-spending regions, aiding targeted interventions.
• Policy Implications: Highlights the need for price stabilization for essentials, rural infrastructure investments, and urban employment growth to address income disparities and rising expenses.

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