Data Shows How Much Monthly Household Expenses Increased In Past 2 Decades

The average monthly expenses in rural and urban households have narrowed in the past two decades with a sharp rise in rural consumption, shows a key expenditure data released after a gap of 11 years.

The average per capita Monthly Household Consumption Expenditure (MPCE) in 2022-23 was Rs 3,773 in rural India and Rs 6,459 in urban areas. The gap in rural and urban expenses reduced to 71.2% from 83.9% in 2011-12, 88.2% in 2009-10, and 90.8% in 2004-05.

In 18 years, the average MPCE in rural areas increased over six times, higher than in the urban areas, shows a factsheet on the Ministry of Statistics website. In 2004-05, the expenditure was Rs 579 in rural and Rs 1,105 in urban, which indicates a 552% growth in rural and 484% in urban areas.

The Household Consumption Expenditure Survey (HCES) was conducted between August 2022 and July 2023. The data is key in assessing critical economic indicators like GDP, retail inflation, and poverty levels.

During 2022-23, the bottom 5% of India’s rural population had an average MPCE of Rs 1,373 while it was Rs 2,001 in the same category in urban areas. For the top 5%, the average MPCE was Rs 10,501 in rural and Rs. 20,824 in urban areas.

A comparative study of the expenditure in different states reveals it is the highest in Sikkim (rural Rs 7,731 and Rs urban 12,105) and the lowest in Chhattisgarh (rural Rs 2,466 and urban Rs 4,483).

The average monthly food expenses were found to be Rs 1,750 (rural) and Rs 2,530 (urban) while non-food expenses were Rs 2,023 (rural) and Rs 3,929 (urban).

The Household Consumption Expenditure surveys are held every five years, but the 2017-18 data was not released due to data quality issues. The last survey that was made public was from 2011-12.

In 2019, the government said the 2017-18 survey showed significant variation in consumption pattern and direction of change. An expert panel that assessed the data had noted discrepancies and recommended changes in the methodology.

The Advisory Committee on National Accounts Statistics had separately recommended that for rebasing of the GDP series, 2017-18 is not an appropriate year to be used as the new base year, the government had said.