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India’s Spending on the High: Per Capita Consumption Soars by 33-40% in 2022-23

India's per capita consumption surged in FY 2022-23, with rural areas up 40% to Rs 2,008/month, and urban regions rising 33% to Rs 3,510/month. The Household Consumer Expenditure Survey, spanning 2.62 lakh households, captures changing consumption patterns, incorporating data from social welfare schemes.
India's Per Capita Expenditure Jumps 33 to 40 percent in a Decade

Per Capita Consumption Expenditure measures the average spending on goods and services by each person in a specific area over a set period. It reflects living standards and economic health, with higher expenditure indicating better well-being and a stronger economy.

India witnessed a significant increase in per capita consumption expenditure in the financial year 2022-23, according to the latest Household Consumer Expenditure Survey by the statistics ministry. The survey revealed a 33-40% rise in monthly per capita spending compared to the figures from 2011-12, showcasing notable economic progress.

In rural areas, the per capita monthly consumption expenditure stood at Rs 2,008, marking a 40% increase from the previous decade. Urban regions saw a 33% rise, with expenditure reaching Rs 3,510 per month. Adjusted for inflation, these figures represent an average annual growth of 3.1% in rural areas and 2.7% in urban areas. This is against the backdrop of India’s real GDP, which has grown by an average of 5.7% annually during the same period.

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The survey, covering 2.62 lakh households across rural and urban areas, is part of the government’s efforts to update the Consumer Price Index (CPI) and the resultant inflation rate. It categorizes consumption into three groups: food items, consumables and service items, and durable goods, encompassing a total of 405 items compared to 347 items in the 2011-12 survey.

An interesting aspect of this survey is the inclusion of data on items received for free through social welfare schemes, such as rice, wheat, laptops, bicycles, and school uniforms. After accounting for these items, the monthly per capita rural consumption expenditure slightly increases to Rs 2,054, and in urban areas, to Rs 3,544.

This survey not only highlights the growth in consumption expenditure among Indian households but also plays a crucial role in revising the CPI series base year, along with updating the basket of goods and services. The detailed report of the survey, eagerly awaited, will provide deeper insights into the changing consumption patterns across the country.

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