India will undertake another survey of family consumption as well as goods and brands at retailers to get a complete picture of domestic spending before adjusting the consumer price index (CPI), according to two government officials.
The government revealed the preliminary findings of the 2022/23 household consumption expenditure survey, the first in more than a decade, over the weekend, revealing that the percentage of food in household expenditures had decreased significantly.
The findings might lead to a fall in the weighting of food in the CPI, which the central bank uses to guide monetary policy.
“The government will wait for the results of the 2023/24 household consumption expenditure survey – conducted between August 2023 and July 2024 – to make changes in the CPI index,” said Pronab Sen, the head of a government statistics commission.
According to the study results, when people’s salaries rise, they spend less on cereals and more on processed food, apparel, health care, and consumer goods.
Sen, India’s former top statistician who is leading a commission to assess data quality, stated that before adding new goods to the CPI index, a retail market survey would be necessary to finalize “representative items and brands”.
“This market survey might take five to six months. So, practically, the change in the base year of the CPI index may only occur next year,” he stated. The CPI index’s base year is now 2012.
The National Sample Survey’s director general, Geeta Singh Rathore, stated that the final report on the 2022/23 household survey will be issued in two to three months.
“The new CPI index, whenever it is released, would be more closer to the price changes in the economy,” she went on to say.
India’s per capita monthly household expenditure has more than quadrupled in the previous decade, according to a study issued late Saturday (Feb 24) by the Ministry of Statistics and Programme Implementation. The research also discovered that Indians are spending less on food and more on discretionary things like as clothing, television, and entertainment.
The National Sample Survey Office (NSSO), which reports to the Ministry of Statistics and Programme Implementation, performed the Household Consumption Expenditure Survey (HCES) from August 2022 to July 2023.
The report displays household Monthly Per Capita Consumption Expenditure (MPCE) in rural and urban locations, as well as across socioeconomic classes.
According to the report, the average MPCE at present rates in urban areas will more than double to Rs 6,459 ($77.93) per month in 2022-23, up from Rs 2,630 ($31.73) in 2011-2012.
Meanwhile, in rural regions, the average monthly MPCE increased from Rs 1,430 ($17.25) in 2011-12 to Rs 3,773 ($45.52) in 2022-23, according to the research.
