Household Consumer Expenditure in India, 2009-10

Top of Form

        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 in its 66^th round survey during July 2009 - June 2010. NSS surveys on consumer expenditure are conducted quinquennially starting from 27^th round (October 1972 – September 1973) and the last quinquennial survey was conducted in NSS 61^st round (July 2004- June 2005) for which, the results have already been released. The NSS 66^th round was the eighth 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 input for estimation of prevalence of poverty by the Planning Commission. The detailed results of 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 7,524 villages in rural areas and 5,284 urban blocks spread over all States and Union Territories except in (i) interior villages of Nagaland situated beyond five kilometres of a bus route (ii) villages in Andaman and Nicobar Islands which remain inaccessible throughout the year and (iii) Leh, Kargil and Poonch  districts of Jammu and Kashmir.

In the 66^th round consumer expenditure survey, the data on household consumption was collected with three reference periods of preceding 7 days, 30 days and 365 days for specified set of items of the consumption basket. Two types of schedules namely Schedule 1.0 Type 1 and Schedule 1.0 Type 2 were canvassed during the survey. The reference periods for different Item Groups divided in three Categories in both the schedules of  the survey are summarized below:

Reference periods used for collection of consumption data in Schedule 1.0 Type 1 and Type 2
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, two measures of MPCE emerged. This was because for each such household, there were two sets of data for Category I items – “last 30 days” data and “last 365 days” data – unlike items of Categories II and III, for which only “last 30 days” was available. Thus there were two 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 data on MPCE_URP and MPCE_MRP (collected from households where Schedule Type 1 was canvassed), two alternative estimates of the distribution of MPCE and average MPCE can be built up.

From each sample household where Schedule Type 2 was canvassed, a single measure of MPCE emerged, as, for each item of consumption, data for only one reference period had been collected. 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 is called the MPCE_MMRP (Modified Mixed Reference Period MPCE).

The values of different types of average MPCE for NSS 61^st and 66^th rounds at all-India level are given below:

Average MPCE (Rs.)
NSS Round	MPCEURP		MPCEMRP		MPCEMMRP
	Rural	Urban	Rural	Urban	Rural	Urban
61st	558.78	1052.36	579.17	1104.60	-	-
66th	927.70	1785.81	953.05	1856.01	1053.04	1984.46

Note: Type 2 Schedule was not canvassed in the 61^st Round.

Besides the average MPCE, the survey results also provide distribution of population over decile classes of MPCE. 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. These decile classes for rural and urban domains are separately arrived at for MPCE_URP, MPCE_MRP and MPCE_MMRP. Further, in addition to all-India decile classes, similar State-specific decile classes are also derived and State-wise results are given for these classes in the detailed tables.

        The results released are mainly based on MPCE_MMRP. However, relevant indicators based on MPCE_URP and MPCE_MRP are also given for comparability.  The estimates of per capita monthly expenditure on food, non-food and total expenditure are provided separately for rural and urban sectors at the State level as well as for all-India across decile classes of MPCE. However, break-up of average MPCE by broad item group of food and non-food items, and item-wise estimates of quantity and value of per capita consumption are given at the all-India level.

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

·        In terms of MMRP estimates, the average MPCE in 2009-10 was estimated as Rs.1053.64 in rural India and Rs.1984.46 in urban India. Thus the per capita expenditure level of the urban population was on the average about 88% higher than that of the rural population.

·        The poorest 10% of India’s rural population had an average MPCE of Rs.453. The poorest 10% of the urban population had an average MPCE of Rs.599. The top 10% of the rural population, ranked by MPCE, had an average MPCE of Rs.2517 – about 5.6 times that of the bottom 10%.  The top 10% of the urban population had an average MPCE of Rs.5863 – about 9.8 times that of the bottom 10%.

·         In rural India, half of the population belonged to households with MPCE below Rs.895 (median value) and nearly 40% of the rural population of India had MPCE below Rs.800. About 60% of rural population  had MPCE below Rs.1000. About 10% had MPCE above Rs.1650.

·        Correspondingly, in urban areas of India, half the population was living with MPCE below Rs.1500, about 70% of population had MPCE above Rs.1100, nearly 30% had MPCE above Rs.2100, and 20% had MPCE above Rs.2600.

·        The share of food in total household expenditure was 57% and 44% in rural and urban India respectively. In rural India, this share in respect of bottom 10% population was 65% and for top 10% population, 46%. In urban India, the share of food was 62% for its bottom 10% population and 31% for top 10 % population.