Mospi mulls frequent expenditure surveys to track consumption patterns

The last base year revision for these key macro-economic indicators undertaken by MoSPI kicked in from January 2015

In a bid to better track changing consumption patterns, the Ministry of Statistics and Programme Implementation (Mospi) is considering more frequent household consumption expenditure surveys (HCES) and base-year revisions for the consumer price index (CPI), sources told Business Standard.

 

“Consumption patterns in the country are rapidly changing, with growing incomes and diversification in consumer products. To better capture them, it is important to conduct HCES more frequently. We are considering having HCES every three years and a revision in the CPI base year every four years. Things are still at a preliminary stage because the base revision exercise is still on,” a source said. 

 

The ministry is revising the base years for key macroeconomic indicators — the index of industrial production (IIP), and gross domestic product (GDP) — to FY23, and calendar year 2024 for the CPI, which are expected to come into effect in February next year. 

 

The last base-year revision for these key macroeconomic indicators was in January 2015.  

 

“The idea is to not have such a long gap. Base-year revisions should happen more frequently because the economy is changing rapidly now. Hence, the reduced frequency for consumption surveys because it is the most important dataset to revise the base years for all indicators,” the source added. 

 

Expenditure surveys are supposed to happen every five years. The latest consumption data, released earlier this year, pertains to August 2023-July 2024. This was the second consumption survey in as many years, and was done to verify the robustness of the changes made in the methodology of the survey. 

 

Earlier in 2019, the government had scrapped the data on the consumption expenditure survey pertaining to the period 2017-18, citing “quality” issues.

 

 After that, it made changes in the methodology. This, however, created a gap of 11 years in the availability of consumption data because the previous available data pertained to the period July 2011-June 2012. This also delayed the base-year revision exercise for all the macroeconomic indicators like the CPI, GDP, and the IIP. 

 

The latest HCES datasets captured important changes in the consumption patterns of the last decade or so. The share of spending on food items by rural India went below 50 per cent for the first time, spending on processed food items increased across the country, conveyance emerged as the top item of expense among non-food items, and online shopping accounted for about 10 per cent of spending in urban areas and 3-4 per cent in rural India.