The National Statistical Office (NSO) recently released the key findings of the Household Consumption Expenditure Survey (HCES) conducted between July 2022 and June 2023. The HCES is conducted by the NSO under the Ministry of Statistics and Programme Implementation every five years. The survey provides estimates of the average household monthly per capita consumer expenditure (MPCE) and the distribution of households and persons over the MPCE classes.
Key Highlights of the Survey
- Survey period: July 2022 to June 2023
- Coverage: Whole of the Indian Union, covering 1,01,579 households (56,108 rural and 45,471 urban) and 4,47,999 persons (2,41,389 rural and 2,06,610 urban)
- Average MPCE: Rs 1,531 in rural India and Rs 3,218 in urban India
Key observations
- The average household MPCE in India was Rs 2,172.
- Monthly per capita expenditure was less than Rs 1,000 for bottom 5% of rural households.
- Significant improvement in living standards compared to last HCES in 2017-18.
Rural and Urban Classification
The HCES classifies all areas in the country into two sectors – Rural and Urban. This classification is as per the latest notification of the Registrar General and Census Commissioner of India:
- Rural: Consists of all rural areas of the country
- Urban: Consists of all Statutory Towns, Census Towns and Out Growths.
Coverage Details
The average household MPCE in India was Rs 2,172 in 2022-23. The MPCE was Rs 1,531 in rural India and Rs 3,218 in urban India. This indicates that the average urban Indian had an MPCE 2.1 times higher than average rural Indian.
The key observations from the MPCE estimates are:
- Rural-urban MPCE gap has widened compared to last HCES in 2017-18.
- Real MPCE (adjusted for inflation) has improved in both rural and urban areas indicating rising living standards.
- In monthly income decile classes, real MPCE has increased for all deciles in rural and urban areas compared to 2017-18.
A summary of nominal and real MPCE estimates in the last three HCES rounds is given below:
| Sector | Nominal MPCE (Rs.) | Real MPCE (Rs.) |
| 2017-18 | ||
| Rural | 859 | 1,265 |
| Urban | 1,909 | 2,836 |
| 2011-12 | ||
| Rural | 630 | 1,431 |
| Urban | 1,984 | 4,481 |
| 1999-00 | ||
| Rural | 395 | 1,746 |
| Urban | 1,001 | 4,455 |
| 2022-23 | ||
| Rural | 1,531 | 1,531 |
| Urban | 3,218 | 3,218 |
Distribution of Households by MPCE Levels
- In rural India, bottom 5% of households had MPCE less than Rs 1,000. The top 5% had MPCE above Rs 4,481.
- In urban India, bottom 5% of households had MPCE less than Rs 1,381. The top 5% had MPCE above Rs 7,705.
- Significant improvements at bottom of MPCE distribution compared to 2017-18.
The distribution of households across different levels of household MPCE is shown in the table below:
Percentage Distribution of Households by Level of Monthly Per Capita Consumer Expenditure
| MPCE Class (Rs.) | Rural | Urban |
| 0 – 1,000 | 5.2 | 0.7 |
| 1,000 – 2,000 | 29.9 | 14.1 |
| 2,000 – 3,000 | 25.5 | 27.5 |
| 3,000 – 5,000 | 30.4 | 42.2 |
| 5,000 – 10,000 | 8.8 | 14.3 |
| >=10,000 | 0.3 | 1.3 |
| All Classes | 100.0 | 100.0 |
Key Observations from MPCE Distribution
- Bottom 5% rural households had MPCE less than Rs 1,000 against Rs 569 in 2017-18 – indicating rising real incomes.
- 96.8% of rural households had MPCE less than Rs 5,000. Only 3.2% above.
- 98.7% urban households had MPCE less than Rs 10,000. Only 1.3% above.
- Inequality appears high with top few % of households having much higher MPCE than rest.
Patterns of Consumption Expenditure
An analysis of broad consumption categories indicates the following expenditure patterns among Indian households:
- Food remains major expenditure head with 42.5% share of value of consumption in rural areas and 36.3% share in urban areas. Cereals and Cereal Substitutes account for 52% of value of rural food consumption and 37% of urban food consumption.
- In rural areas, 14.6% was spent on Fuel and Light followed by 13.7% on clothing and footwear.
- In urban areas, 18% was spent on education after food, fuel and clothing & footwear. High spend on education indicates urban households attach high priority.
Percentage Distribution of Monthly per capita Consumer Expenditure by Broad Consumption Categories
| Category | Rural | Urban |
| Cereals and Cereal Substitutes | 21.9 | 13.2 |
| Milk and Milk Products | 8.5 | 7.0 |
| Edible Oil | 3.5 | 2.6 |
| Vegetables | 7.6 | 7.3 |
| Meat, Fish and Eggs | 3.5 | 3.1 |
| Other Food items | 10.0 | 7.9 |
| Pan, Tobacco and Intoxicants | 3.3 | 1.8 |
| Fuel and Light | 14.6 | 9.7 |
| Clothing and Footwear | 13.7 | 8.8 |
| Miscellaneous Goods and Services | 5.6 | 14.0 |
| Health (Medical Care) | 6.2 | 6.3 |
| Conveyance | 4.5 | 6.2 |
| Education | 2.8 | 9.6 |
| Others | 0.4 | 0.5 |
Rising Share of Non-food Items
Over the years, the share of non-food expenditure in total household expenditure has been rising. This indicates changing lifestyles and rising incomes. Some key aspects:
- Share of food in total expenditure has declined while share of non-food items has increased compared to 2011-12.
- In rural areas, share of non-food expenditure increased from 46.5% to 57.5% between 2011-12 and 2022-23.
- In urban areas, share increased from 60.4% to 63.7% in the same period.
Within food items, share of protein rich items like milk, meat and eggs has registered an increase. This indicates improving nutrition intake. The reduction has mainly occurred in cereals & cereal substitutes.
The key findings of the HCES 2022-23 reveal rising real MPCE across rural and urban areas compared to previous rounds, indicating rising living standards. However, inequality remains high as revealed by the distribution of households across MPCE classes. While nutritional intake has improved, protein consumption needs to rise much faster.
Last Modified: February 26, 2024