Consumer Expenditure Survey

  • Recently, the Ministry of Statistics and Programme Implementation (MoSPI) decided not to release the results of the all-India Household Consumer Expenditure Survey conducted by the National Statistical Office (NSO) during 2017-2018.
  • It asserted that any findings from the survey that had been referred to in media reports were essentially “draft in nature”.

Reason for withholding Data

  • A media leak has revealed that the 2017-18 Consumer Expenditure Survey the results had been withheld due to the adverse findings in the survey which showed consumer spending was falling.
  • There was a significant increase in the divergence in not only the levels in the consumption pattern but also the direction of the change when compared to the other administrative data sources like the actual production of goods and services.
  • Survey lacks ability to capture consumption of social services by households, especially on health and education.
  • According to the leaked version of the 2017-18 survey, the data revealed a decline in the Per Capita Consumer Expenditure(MPCE), making it the first such drop since 1972-73. In real terms (adjusted for inflation) the MPCE slid by 7% from Rs 1,501 in 2011-2012 to Rs 1,446 in 2017-2018.

Government’s Response

  • MoSPI stated that there is a rigorous procedure for vetting of data and reports, which are produced through surveys. All such submissions, which come to the ministry, are draft in nature and cannot be deemed to be the final report.
  • Further, the government referred the matter to a Committee of experts which noted the discrepancies and came out with several recommendations including a refinement in the survey methodology and improving the data quality aspects on a concurrent basis. The recommendations of the Committee are being examined for implementation in future surveys.

Consumer Expenditure Survey

  • The CES is aquinquennial (recurring every five years) survey conducted by the government’s National Sample Survey Office (NSSO) that is designed to collect information on the consumption spending patterns of households across the country, both urban and rural.
  • The last survey on consumer expenditure was conducted in the 68th round (July 2011 to June 2012).
 Source: The Hindu
Significance of CES
  • Estimation of Monthly Per Capita Consumer Expenditure: The data gathered in this survey reveals the average expenditure on goods (food and non-food) and services and helps generate estimates of household Monthly Per Capita Consumer Expenditure (MPCE) as well as the distribution of households and persons over the MPCE classes.
  • Assessing Living Standards and Growth: The estimates of monthly per capita consumption spending are vital in gauging the demand dynamics of the economy as well as for understanding the shifting priorities in terms of baskets of goods and services, and in assessing living standards and growth trends across multiple strata.
  • Important Analytical and Forecasting Tool: It is an invaluable analytical as well as forecasting  tool for the  policymakers to spot and address possible structural anomalies that may cause demand to shift in a particular manner in a specific socio-economic or regional cohort of the population. It is, in fact, used by the government in rebasing the GDP and other macro-economic indicators.
National Statistical Office (NSO)
  • The NSO is responsible for conduct of large scale sample surveys in diverse fields on All India basis. Primarily data are collected through nation-wide household surveys on various socio-economic subjects, Annual Survey of Industries (ASI), etc.
  • It also  collects data on rural and urban prices and plays a significant role in the improvement of crop statistics through supervision of the area enumeration and crop estimation surveys of the State agencies.  It also maintains a frame of urban area units for use in sample surveys in urban areas.

Final Word

  • If there were data quality issues, it would have been discovered long before the report was drafted. Even assuming severe inconsistencies in the data collected, the right course would have been to publish a report with the findings and the perceived limitations, which could have been of use to researchers.
  • There is still legitimate concern that the draft report must be published because the government has spent millions of rupees collecting the data and hence is obliged to publish it. The government’s decision to with hold the survey’s findings deprives policymakers of invaluable contemporary consumption data that would have helped drive their intervention strategies.
  • The next survey’s findings,depending on when the Ministry decides to actually undertake it, 2020-21 or 2021-22 — would end up coming after 9 or 10 years after the 2011-12 round.
  • Further, India, as a subscriber to the International Monetary Fund’s Special Data Dissemination Standard (SDDS), is obliged to follow good practices in four areas in disseminating macroeconomic statistics to the public- 1) the coverage, periodicity, and timeliness of data, 2) public access to those data, 3) data integrity, 4) data quality.
  • With the IMF’s ‘Annual Observance Report’ for 2018 already having flagged concerns about India’s delays in releasing economic data, India risks violating its SDDS obligations.
  • This suppression of essential data is terrible for accountability and for ensuring that citizens have the benefit of official data collection that is paid for with their taxes. It is also counterproductive for the government, which may be kept in the dark about actual trends in the economy and therefore not be able to devise appropriate policies. Undermining the objectivity and credibility of an independent statistical system is fundamentally against the national interest.