Consumption Expenditure Survey 2023-24: Non-food items lead household spending trends; rent major contributor

The urban-rural gap in monthly per capita consumption expenditure (MPCE) narrowed to 70% in 2023-24 from 71% in the previous fiscal year as rural consumption continued its upward trajectory, a survey by the Ministry of Statistics and Programme Implementation (MoSPI) showed.

The survey, conducted between August 2023 and July 2024, estimated the average MPCE in rural areas at ₹4,122 and in urban areas at ₹6,996, excluding the imputed value of items provided free of cost through government welfare schemes. When such benefits were included, the MPCE rose to ₹4,247 in rural areas and ₹7,078 in urban areas.

“The urban-rural gap in MPCE has declined to 71% in 2022-23 from 84% in 2011-12. It has further come down to 70% in 2023-24 that confirms sustained momentum of consumption growth in rural areas,” the ministry said in a release.

Sikkim emerged as the state with the highest monthly per capita consumption expenditure, reporting ₹9,377 in rural areas and ₹13,927 in urban areas. On the other hand, Chhattisgarh had the lowest figures, with rural and urban MPCE at ₹2,739 and ₹4,927, respectively.

Among Union Territories, Chandigarh led with an MPCE of ₹8,857 in rural areas and ₹13,425 in urban areas, while Dadra and Nagar Haveli and Daman and Diu reported the lowest MPCE of ₹4,311 in rural areas.

Meghalaya displayed the highest rural-urban disparity in MPCE at 104%, followed by Jharkhand at 83% and Chhattisgarh at 80%.

Non-food items continued to dominate household spending, accounting for 53% of total expenditure in rural areas and 60% in urban areas. Conveyance, clothing, entertainment, and durable goods were the major contributors to non-food spending.

“Rent with a share of around 7% is another major constituent of households’ non-food expenditure in urban India,” the ministry said.

The rent expenditure mentioned in the survey consists of house rent, garage rent and hotel accommodation charges.

Beverages, processed foods, and milk products remained the primary contributors to food-related expenditure, consistent with trends observed in the previous survey.

The survey also revealed that inequality in household consumption decreased over the year. The Gini coefficient, a measure of inequality, declined to 0.237 in rural areas from 0.266 in 2022-23, and to 0.284 in urban areas from 0.314.

The largest increase in MPCE was observed among the bottom 5-10% of the population, in both rural and urban areas.

The survey is designed to collect information on the consumption and expenditure of the households on goods and services. The data collected in the HCES survey plays a key role in reviewing economic indicators like Gross Domestic Product (GDP), Consumer Price Index (CPI), poverty levels, and inequality.

The government had previously released such data in February 2024 after an 11-year gap.