City rents pinch more than before: Household consumption expenditure survey

Share in expenditure higher than previous consumption expenditure survey reports dating back to at least 1999-2000

The average person living in an Indian city allocates more of her budget to paying rent than ten, or even twenty years ago.

The share of rent in the monthly per capita consumption expenditure (MPCE) for urban India rose to 6.56 per cent, according to the latest Household Consumption Expenditure Survey (HCES) in 2022-23. 

This was the highest it has been in similar surveys going back to at least 1999-2000. It was 4.46 per cent at the turn of the millennium.

The government released data on India’s consumption patterns on Saturday.

The last available numbers are from 2011-12-around a decade ago. The government junked the exercise it carried out for 2017-18 citing ‘data quality’ issues.

The 2017-18 survey indicated a worsening of consumption trends.

The current data shows an improvement. Rural monthly consumption per person was up 40 per cent after adjusting for inflation. It was up 33 per cent in urban areas.  

In addition to rent, city dwellers are also spending big on travel. This comes under the head of conveyance in the survey. It includes travelling back and forth from work.

The cost of fuel is considered if one owns a vehicle. The share of conveyance in the total consumer spending has also gone up. It was 8.59 per cent in 2022-23, compared to 6.52 per cent in 2011-12. 

The average city dweller spends a larger share of the consumption budget on conveyance than on rent, according to government data.

Rent in rural India accounts for 0.76 per cent of average consumer spending. This is around a tenth of the budget share seen in urban India. The number has gone up in the last decade or so. The share of rent was 0.45 per cent in 2011-12.

The money spent on conveyance in rural India has seen a sharp rise. It accounted for 7.38 per cent of spending in 2022-23. It was 4.2 per cent in 2011-12.

Rural India spends a smaller share of its consumption budget on conveyance than those living in cities. But the gap between the two has narrowed.

The overall consumption expenditure in rural India was around half of the amount seen in cities. The average monthly consumption expenditure in rural India was Rs 3,860.

It was Rs 6,521 in urban India. One major change has been the fact that food no longer accounts for the majority of consumption in rural India. It was at 47.47 per cent in 2022-23, compared to 52.9 per cent in 2011-12.

Other expenses have shown a varying trend in urban India. The share of education has fallen to 5.73 per cent compared to 6.9 per cent earlier.

It fell to 3.23 per cent from 3.49 per cent in rural India. But medical expenses have gone up. 

The total share of medical expenses was 5.91 per cent in urban areas from 5.54 per cent a decade ago. It moved to 6.97 per cent from 6.65 per cent in rural India over the same period.

Year	Rent (% share in total MPCE)
1999-00	4.46
2004-05	5.38
2009-10	5.79
2011-12	6.24
2022-23	6.56

Note: Shows trends in monthly per capita consumption expenditure (MPCE) for urban India.

Source: Household Consumption Expenditure Survey (HCES) 2022-23