The Household Consumption Expenditure Survey (HCES) is a critical statistical concept and a large-scale, periodic survey conducted in India to gauge household spending habits. The survey collects detailed information on the consumption and expenditure patterns of households on a wide range of goods and services, including food, clothing, housing, education, and healthcare.
The HCES has its origins in the National Sample Survey (NSS), which began conducting surveys on household consumption expenditure at regular intervals since its inception in 1951. The survey is conducted by the National Statistical Office (NSO), which is under the Ministry of Statistics and Programme Implementation (MoSPI). The primary problem it solves is providing official estimates of per capita household spending, which is essential for assessing living standards, well-being, and consumption behavior across the country. Since the 26th round, the survey has been conducted roughly every five years, making it a quinquennial exercise.
The core mechanism of the HCES is the calculation of Monthly Per Capita Consumption Expenditure (MPCE), which is the total value of a household's monthly consumption of goods and services divided by the number of household members. The survey uses a multi-stage stratified sampling design, selecting villages/urban blocks as the first stage units and households as the ultimate stage units. In the HCES: 2023-24, information was collected from over 2.6 lakh households using multiple questionnaires in three separate monthly visits to capture data on food items, consumables and services, and durable goods.
The HCES is intrinsically connected to several key economic concepts and indicators. The data provides the budget shares of different commodity groups, which are used to prepare the weighting diagram for the compilation of the official Consumer Price Indices (CPI). It is also crucial for estimating poverty levels, measuring inequality (often using the Gini coefficient), and revising the base year for macroeconomic indicators like Gross Domestic Product (GDP).
The survey methodology has undergone recent changes and scrutiny. The results of the 2017-18 survey were not released due to "data quality issues," creating a significant data gap since the last released survey in 2011-12. To address this, MoSPI decided to conduct two consecutive surveys in 2022-23 and 2023-24 using a revised methodology. A key change in the new methodology is the collection of information on the value of items received free of cost through social welfare programs, such as food grains, though the official MPCE estimates are often presented both with and without this imputation. The new surveys have shown a decline in consumption inequality and a narrowing of the rural-urban gap in MPCE.