Filling the void
The release of the Household Consumption Expenditure Survey (HCES) findings after a yawning gap of 11 years presents a glimmer of hope in terms of providing crucial policy insights. Regrettably, findings of the last survey conducted in 2017, which highlighted rising poverty levels, were scrapped by the government citing “data quality” issues. On the contrary, the latest HCES factsheet presented by the Ministry of Statistics and Programme Implementation (MoSPI) is based on a modified methodology, and presents outcomes on the “favourable” lines. In the revised methodology, households are visited thrice for data collection, as opposed to the previous single visit. Additionally, expenditure details, previously collected in a lump sum, are now categorised into three sections — food items, consumables and services, and durable goods. This adjustment aims to identify potential underconsumption or overconsumption patterns.
The HCES findings for 2022-23 offer a fascinating glimpse into the changing dynamics of consumption pattern in India. One of the most striking trends illuminated by the HCES data is the discernible decline in the proportion of household expenditure allocated to food items. This decline, observed across both rural and urban demographics, reflects a broader transition towards a more diversified consumption basket. However, what truly captures attention is the underlying transformation in the composition of food expenditure itself.
The shift from staples like foodgrains and sugar to protein-rich animal products and horticulture items signifies a qualitative evolution in dietary choices. This transition, from foods primarily serving caloric needs to those rich in proteins and micronutrients, mirrors an emerging consciousness towards holistic nutrition and well-being. It signifies a maturation of consumer preferences driven by rising incomes and heightened awareness of health-related concerns. Evidently, these shifts align with the so-called Engel Curve hypothesis, reaffirming the correlation between income growth and expenditure patterns. A caveat, however, must be put in place here. It is not yet clear up to what extent the increased consumer spending on a particular food item depends on inflationary shifts or changing dietary preferences, as the case may be.
Additionally, the implications of the trends highlighted in the HCES factsheet extend beyond the realm of individual choice to encompass broader economic and policy considerations. The data underscores the imperative of aligning agricultural policies with evolving consumption patterns. However, this in no way implies that there is any scope for dilution of policies promoting the production and consumption of cereals, many of which are associated with the MSP regime; though it does suggest that the government must recalibrate its focus on purely market-driven products like dairy, poultry, and horticulture products.
Undoubtedly, the HCES data serves as a potent tool for informed policymaking, offering valuable insights into consumption trends and economic dynamics. By utilising this data, policymakers can formulate targeted interventions aimed at promoting sustainable growth and enhancing societal welfare. From fostering agricultural diversification to addressing nutritional disparities, the HCES data holds the key to more effective policy formulation. However, at the top of everything, it should be remembered that objectivity is a vital aspect of data, and should not be compromised to produce ‘favourable’ or ‘unfavourable’ results.
