Recently, the Indian government has taken the decision to withhold the results of the all-India household Consumer Expenditure Survey (CES) that was carried out in 2017-18. The primary reason for this move is the apprehension over the quality of the collected data. Meanwhile, the government is weighing the possibility of conducting the upcoming CES in 2020-2021 and 2021-22, with added measures to ensure improved data quality.
According to an unofficial version of the 2017-18 survey, there has been a noticeable decrease in the Monthly Per Capita Consumer Expenditure (MPCE), the first such decline since 1972-73. The preceding consumer expenditure survey took place between July 2011 and June 2012.
About Consumer Expenditure Survey
The CES is conventionally a quinquennial survey executed by the National Sample Survey Office – NSSO, under the Ministry of Statistics and Programme Implementation. This survey aims to collect data on consumption expenses of urban and rural households across the nation.
The data gathered gives an insight into the average spending on goods (food and non-food) and services, allowing for the estimation of the MPCE and the dispersion of households and individuals over varying classes of MPCE.
Significance of CES
Beyond economic analysis, the CES is also a predictive tool that assists the government in planning necessary interventions and policies. It showcases shifts in preferences towards different goods and services, indicating the changing demands of the economy. Furthermore, it evaluates living standards and growth trajectories across different strata.
Usefulness for Policymakers
Policymakers utilize the CES to identify and address potential structural anomalies that might lead to demand shifts in particular socio-economic or regional divisions of the populace. It is also used to rebase the Gross Domestic Product (GDP) and other macro-economic indicators.
Table: The CES (2011-12) findings
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| | Urban Expenditure | Rural Expenditure |
|————–|——————-|——————-|
| Average MPCE | ₹ 2630 | ₹ 1430 |
| Cereals | 6.7% | 10.8% |
| Rent | 6.2% | 0.5% |
| Education | 7% | 3.5% |
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Ramifications of Withholding the Data
By not publishing the CES results, the upcoming survey’s findings—depending on when they are actually scheduled, either in 2020-21 or 2021-22—would come 9 or 10 years after the 2011-12 round, rather than the usual six-year gap. As the CES forms the basis of inequality estimation in India, it is also used for adjusting the consumer price index and GDP data. Thus, scrapping the survey leads to further delays in updating these vital statistics.
India’s Obligations Towards IMF
As a member of the International Monetary Fund’s Special Data Dissemination Standard (SDDS), India has committed to adhering to best practices in four areas regarding the dissemination of macroeconomic statistics to the public. These include data coverage, periodicity and timeliness of data, public access to the data, data integrity, and data quality. Not releasing the CES data could potentially violate India’s SDDS commitments.
Possible Solution
One way forward might be for the government to release the data while acknowledging its limitations. Suppressing data may further weaken its credibility. It must be remembered that reliable and timely data forms the foundation of robust policymaking, and any doubts about official data undermine the credibility of the entire institutional structure.
