Level and Pattern of Consumer Expenditure,

Transcription

1 Report No. 508(61/1.0/1) Level and Pattern of Consumer Expenditure, NSS 61 st Round (July June 2005) National Sample Survey Organisation Ministry of Statistics and Programme Implementation Government of India December 2006

2 Preface Data on household consumer expenditure are being collected every year by the National Sample Survey Organisation (NSSO) as part of its regular rounds, each round normally of a year s duration and including two or three subjects of survey such as household consumer expenditure, land and livestock holdings, etc. Data are collected by the household interview method from a randomly selected sample of households spread over all States and Union Territories of India. While every round of NSS nowadays includes a consumer expenditure survey, the 61 st round survey (July June 2005), on which this report is based, belongs to the quinquennial series of consumer expenditure surveys, started in the 27 th round of NSS ( ), and covering a larger-than-usual sample of households. The 61 st round survey of consumer expenditure is the seventh survey of the quinquennial series. This report is based on the Central sample, from which data were collected by NSSO officials, as opposed to the State sample, where officials of the State Government carried out the survey. For the Central sample, data were collected from 124,644 households spread over 7999 villages and 4602 urban blocks. This report is the first of a series of seven reports to be brought out from the data collected through the survey. It presents data on both level of measured by the sum of monetary values of goods and services consumed by households during a reference period of 30 days and pattern of, reflected in the composition of total by commodity group. As is the practice in NSS surveys, not only average levels of but also the distribution of households and persons over different ranges of level are presented, separately for rural and urban areas of each State and Union Territory of the country. Such distributions allow studies of inequality and poverty in different regions of the country, and are used in estimating the number of persons below the poverty line. Chapter One of the report serves as the introduction. Chapter Two explains the concepts and definitions used in the survey. Chapter Three gives the main findings of the survey. Chapter Four discusses the effect on the estimates of using different reference periods last 30 days and last 365 days to collect data on groups of less frequently purchased items such as clothing and durables, with reference to the 61 st round survey of consumer expenditure as well as the 50 th round survey, conducted in Detailed tables at the State/UT and all-india level are given in Appendix A, while the sample design and the estimation procedure are explained in Appendix B. A facsimile of the schedule used for data collection is given as Appendix C. Development of sampling design and survey instruments, and preparation of the report, was undertaken by the Survey Design and Research Division of the NSSO. The field work was handled by the Field Operations Division and the data processing and table generation by the Data Processing Division. The Coordination and Publication Division was responsible for overall coordination. The Chairman and Members of the Governing Council of NSSO, along with the Chairman and Members of the Working Group set up for this round, provided the technical directions and guidance at every stage of the survey. I am grateful to all of them.

3 The report, I hope, will be useful to planners, policy makers and researchers. Comments and suggestions are most welcome. New Delhi December 2006 Vishnu Kumar Director General & Chief Executive Officer National Sample Survey Organisation

4 Highlights A sample of rural households and urban households spread over the entire country was surveyed in the Consumer Expenditure Survey of the 61 st round of NSS (the seventh of the quinquennial series), carried out in LEVEL OF CONSUMPTION IN The survey estimated that in , 5% of the Indian rural population belonged to households with monthly per capita consumer expenditure (MPCE) in the range Rs.0-235, that is, spending less than Rs.8 per person per day on. Another 5% of the Indian rural population belonged to households with monthly per capita expenditure in the range Rs , that is, spending about Rs.8-9 per person per day on. The poorest 5% of the urban population of India (ranked by per capita spending levels) in belonged to households with monthly consumer expenditure per person in the range Rs.0-335, that is, spending less than Rs.11 per person per day on. Another 5% of the Indian urban population belonged to households with monthly per capita expenditure in the range Rs , that is, spending about Rs per person per day on. Average monthly per capita consumer expenditure (average MPCE) in was Rs.559 in rural India and Rs.1052 in urban India at prices. About 5% of the rural population of India in had MPCE of Rs.1155 or more. Another 5% had MPCE between Rs.890 and Rs About 5% of the urban population of India in had MPCE of Rs.2540 or more. Another 5% had MPCE between Rs.1880 and Rs The Lorenz ratio for total consumer expenditure, indicating concentration in total expenditure among the population, was 0.30 for rural India and 0.35 for urban India in In case of expenditure on cereals, for which the range of variation among the population is narrower, the specific concentration ratio was 0.08 for both rural and urban India. BROAD PATTERN OF CONSUMPTION IN Out of every rupee spent in by the average rural Indian on, 55 paise was spent on food. Of this, 18 paise was spent on cereals and cereal substitutes, 8 paise on milk and milk products, 6 paise on vegetables, 5 paise on edible oil, 5 paise on sugar, salt and spices, and 5 paise on beverages, refreshments and processed food. Out of every rupee spent in by the average urban Indian on, 43 paise was spent on food. Of this, 10 paise was spent on cereals and cereal substitutes, 8 paise on milk and milk products, 6 paise on beverages, refreshments and processed food, and 4 paise on vegetables.

5 ii Highlights In both rural and urban India, fuel and light took up 10% of total consumer expenditure while clothing, bedding and footwear took up 5%. Medical expenses formed 7% of total consumer expenditure in rural India and 5% in urban India. Educational expenses formed 3% of total consumer expenditure in rural India and 5% in urban India. Conveyance expenses formed 4% of total consumer expenditure in rural India and 7% in urban India. CEREAL CONSUMPTION IN Average quantity of cereals consumed per person per month in was 12.1 kg in rural areas and 9.9 kg in urban areas. Average value of cereals consumed per person per month was Rs.101 in rural India and Rs.106 in urban India. In rural areas of Haryana and Punjab, expenditure on cereals in formed only 9% of total consumer expenditure. But in rural areas of West Bengal and Assam cereals contributed 23% or more to total consumer expenditure, and in rural areas of Orissa, Chhattisgarh, Jharkhand and Bihar, they formed 27-28% of consumer expenditure. In urban areas of Punjab and Haryana cereals took up 6-7% of the household () budget in ; in urban areas of Bihar and Orissa they took up 17%. TRENDS IN CONSUMPTION Between and , the share of food in total consumer expenditure has fallen from 73% to 55% in rural areas and from 64% to 42% in urban areas. The share of cereals has fallen from 41% of consumer expenditure to 18% in rural India and from 23% to 10% in urban India over the same period. The share of fuel and light in total consumer expenditure has risen from under 6% to 10% in both rural and urban areas between and The share of clothing in total consumer expenditure over the last three decades has fallen from 7-8% to 4.5% in rural India and from 5-7% to 4% in urban India. Quantity of cereals consumed per person per month has declined between and , that is, in the decade preceding the survey, from 13.4 kg to 12.1 kg in rural India and from 10.6 kg to 9.9 kg in urban India.

6 Contents Highlights. Chapter One Introduction 1 Chapter Two Concepts and Definitions 4 Chapter Three Basic Results on Per Capita Consumption Expenditure 10 Chapter Four Alternative Estimates of Consumption of Some Items by Use of Different Recall Periods Appendix A Detailed Tables*. A-1 A-278 Appendix B Sample Design and Estimation Procedure. B-1 B-8 Appendix C Schedule 1.0 C-1 C-19 *List overleaf i 37

7 iv Appendix A: Detailed Tables Note: All tables are given separately for each State/UT except Table 6. Table 1R and 1U Per 1000 break-up of households and persons by MPCE class and number per 1000 households of adults and children by sex in different MPCE classes Table 2R and 2U State/UT-wise per 1000 break-up of households by size for each MPCE class Table 3R and 3U Average quantity (kg) of of cereals and pulses per person for a period of 30 days for each MPCE class, by State/UT Table 4R and 4U Average value (Rs) of of cereals and pulses per person for a period of 30 days for each MPCE class, by State/UT Table 5R and 5U Value of (Rs) of broad groups of food and non-food items per person for a period of 30 days for each MPCE class (a) using a reference period of 30 days for all items (b) using a reference period of 365 days for clothing & bedding, footwear, education, medical (institutional) and durable goods only Table 6R and 6U Per 1000 break-up of households by adjusted MPCE class (based on 365 days data for clothing, footwear, education, medical (institutional) and durable goods) for each MPCE class (based on 30 days data for all items) A-1 A-24 A-25 A-60 A-61 A-132 A-133 A-204 A-205 A-276 A-277 A-278

8 Chapter One Introduction This is a report on household consumer expenditure in India based on a nationwide sample survey of the National Sample Survey Organisation The NSSO conducts regular consumer expenditure surveys as part of its rounds, each round normally of a year s duration and covering more than one subject of study. The surveys are conducted through household interviews, using a random sample of households covering practically the entire geographical area of the country. The present report is based on data collected through the 61 st round of NSS (July 2004-June 2005). This is the first report of the consumer expenditure survey of that round The last NSS report 1 on consumer expenditure related to Jan-June 2004 and was based on the 60 th round survey, conducted during that period Compared to that report, the present report (a) relates to a later period; (b) is based on a full year s survey and not a 6-month survey; (c) is part of the quinquennial series of larger-than-usual-scale surveys on consumer expenditure conducted every 5 years or so, the preceding one having been conducted in (note that nowadays every round of NSS includes a survey on consumer expenditure); (d) does not cover all the data on living conditions collected in the consumer expenditure survey, as some are to be brought out in subsequent reports (in all seven reports are to be based on the 61 st round consumer expenditure survey, compared to only one report for the 60 th round survey); and (e) gives much more detailed results at State/UT level in the sense that separate estimates of are given for households belonging to 12 different expenditure classes in the last report this was done only for the all-india results The basic data released through the present report are: (i) State/UT and all-india level size distributions of households and persons grouped over different ranges of Monthly Per Capita household consumer Expenditure (or different MPCE classes), separately for rural and urban areas; (ii) Average monthly per capita consumer expenditure (average MPCE) for each State/UT and all-india; (iii) Break-up of average MPCE over a number of commodity groups (14 food groups and 18 non-food groups) for each State/UT and all-india; (iv) Quantity and value of per capita of different cereals and pulses for each State/UT and all-india; 1 NSS Report No.505: Household Consumer Expenditure in India

9 2 Chapter One (v) Alternative estimates of per capita expenditure on certain groups of relatively infrequently purchased commodities based on different reference periods for data collection All the data are provided separately for rural and urban sectors. In case estimates of per capita are required for rural and urban combined (for a State/UT or all- India), the two estimates for rural and urban sectors will have to be aggregated using the estimates of rural population and urban population as weights The contents numbered (i) to (iv) above make this a basic report on consumer expenditure, and possibly the most important one, of the 61 st round survey. It needs also to be mentioned that the estimates of categories (ii), (iii) and (iv) are provided separately for the populations in 12 different MPCE classes, in other words, for 12 groups of the population from poorest to richest, in terms of per capita expenditure level Chapter Two explains the concepts and definitions followed in the survey and in the preparation of this report. Basic results on per capita consumer expenditure (viz., those numbered (i)-(iv) in paragraph above) are discussed in Chapter Three. The alternative estimates for selected item groups based on a last year reference period are presented in Chapter Four The detailed tables at all-india and State/UT level are given in Appendix A. Unlike the reports based on the last 5 rounds of NSS, estimates for all States and Union Territories are provided in all the tables of Appendix A in this report 2 (except Table 6, which relates to methodological issues) Appendix B gives details of the sample design and estimation procedure followed and Appendix C is a facsimile of the consumer expenditure schedule ( Schedule 1.0 ) that was canvassed in the surveyed households Some readers may recall that in the 27 th, 32 nd, 38 th, 43 rd and 50 th rounds of NSS, a schedule on employment-unemployment and a schedule on consumer expenditure were canvassed in the same sample of households, that is, sample households interviewed for one subject were also interviewed during the same visit for the other subject of enquiry. This was done to enable employment-unemployment data to be cross-classified by information on level. From the 55 th round ( ) onwards, the practice of linking the two bodies of data in this way has been discontinued to minimise respondent fatigue from very long interviews Some details of the survey Geographical coverage: The survey covered the whole of the Indian Union except (i) Leh (Ladakh) and Kargil districts of Jammu & Kashmir, (ii) interior villages of Nagaland situated beyond five kilometres of a bus route and (iii) villages in Andaman and Nicobar Islands which remain inaccessible throughout the year. 2 This is the usual practice followed in the rounds of the quinquennial series (see paragraph 1.0.4). This survey is the seventh of the series. 3 To collect some information on level, the employment-unemployment schedule of the 60 th round used a short-cut worksheet. This has permitted some tabulation of employment data by level in the employment-unemployment reports of the 61 st round.

10 Chapter One Sample size first-stage units: As is usual in the regular NSS rounds, most States and Union Territories participated in the survey: a State sample was surveyed by State Government officials in addition to the Central sample surveyed by NSSO. For rural India, 8128 villages formed the Central sample for this round. Of these, 7999 villages were ultimately surveyed. In the urban sector, the allocation for the Central sample was 4660 blocks, of which 4602 were surveyed. This report is based on the estimates obtained from the Central sample alone Table P1 shows the numbers of villages and urban blocks allotted for survey and actually surveyed, the numbers of rural and urban sample households in which the consumer expenditure schedule, Schedule 1.0, was canvassed, and the corresponding numbers of sample persons covered. Table P1: Number of villages/blocks allotted and surveyed for Schedule 1.0 and number of households and persons surveyed: Central sample State/UT no. of villages no. of urban blocks no. of sample households no. of sample persons allotted surveyed allotted surveyed rural urban rural urban (1) (2) (3) (4) (5) (6) (7) (8) (9) Andhra Pradesh Arunachal Pradesh Assam Bihar Chhattisgarh Delhi Goa Gujarat Haryana Himachal Pradesh Jammu & Kashmir Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Manipur Meghalaya Mizoram Nagaland Orissa Punjab Rajasthan Sikkim Tamil Nadu Tripura Uttar Pradesh Uttaranchal West Bengal A & N Islands Chandigarh Dadra & N. Haveli Daman & Diu Lakshadweep Pondicherry All India *Note that as many as 98 out of 129 allotted villages that could not be surveyed belonged to the disturbed areas of Jammu and Kashmir.

11 Chapter Two Concepts and Definitions 2.1 Household: A group of persons normally living together and taking food from a common kitchen constitutes a household. The word "normally" means that temporary visitors are excluded but temporary stay-aways are included. Thus, a son or daughter residing in a hostel for studies is excluded from the household of his/her parents, but a resident employee or resident domestic servant or paying guest (but not just a tenant in the house) is included in the employer/host's household. "Living together" is usually given more importance than "sharing food from a common kitchen" in drawing the boundaries of a household in case the two criteria are in conflict; however, in the special case of a person taking food with his family but sleeping elsewhere (say, in a shop or a different house) due to space shortage, the household formed by such a person's family members is taken to include the person also. Each inmate of a mess, hotel, boarding and lodging house, hostel, etc. is considered as a single-member household except that a family living in a hotel (say) is considered as one household only; the same applies to residential staff of such establishments. 2.2 Adult: A person who has completed 15 years of age. 2.3 Household size: The size of a household is the total number of persons in the household. 2.4 Household consumer expenditure: The expenditure incurred by a household on domestic during the reference period is the household's consumer expenditure. Household consumer expenditure is the total of the monetary values of of various groups of items, namely (i) food, pan (betel leaves), tobacco, intoxicants and fuel & light, (ii) clothing and footwear and (iii) miscellaneous goods and services and durable articles. 2.5 For groups (i) and (ii), the total value of is derived by aggregating the monetary value of goods actually consumed during the reference period. An item of clothing and footwear would be considered to have been consumed if it is brought into maiden or first use during the reference period. The may be out of (a) purchases made in cash or credit during the reference period or earlier; (b) home-grown stock; (c) receipts in exchange of goods and services; (d) any other receipt like gift, charity, borrowing and (e) free collection. Home produce is evaluated at the ex farm or ex factory rate. For evaluating the of the items of group (iii), i.e., items categorised as miscellaneous goods and services and durable articles, a different approach is followed. In this case, the expenditure made during the reference period for the purchase or acquisition of goods and services is considered as. 2.6 It is pertinent to mention here that the consumer expenditure of a household on food items relates to the actual by the members of the household and also by the guests during ceremonies or otherwise. To avoid double counting, transfer payments like charity, loan advance, etc. made by the household are not considered as for items of groups (i) and (ii), since transfer receipts of these items have been taken into account.

12 Chapter Two 5 However, the item "cooked meals" is an exception to this rule. Meals prepared in the household kitchen and provided to the employees and/or others would automatically get included in domestic of employer (payer) household. There is a practical difficulty of estimating the quantities and values of individual items used for preparing the meals served to employees or others. Thus, to avoid double counting, cooked meals received as perquisites from employer household or as gift or charity are not recorded in the recipient household. As a general principle, cooked meals purchased from the market for of the members and for guests and employees will also be recorded in the purchaser household. 2.7 This procedure of recording cooked meals served to others in the expenditure of the serving households leads to bias-free estimates of average per capita as well as total consumer expenditure. However, donors of free cooked meals are likely to be concentrated at the upper end of the per capita expenditure range and the corresponding recipients at the lower end of the same scale. Consequently, the derived nutrition intakes may get inflated for the rich (net donors) and understated for the poor (net recipients). This point has to be kept in mind while interpreting the NSS consumer expenditure data for studies relating to the nutritional status of households. 2.8 Value of : Consumption out of purchase is evaluated at the purchase price. Consumption out of home produce is evaluated at ex farm or ex factory rate. Value of out of gifts, loans, free collections, and goods received in exchange of goods and services is imputed at the rate of average local retail prices prevailing during the reference period. 2.9 Monthly per capita consumer expenditure (MPCE): For a household, this is the total consumer expenditure over all items divided by its size and expressed on a per month (30 days) basis. A person s MPCE is understood as that of the household to which he or she belongs Reference periods: The reference periods used for collection of data for different groups of items are given below: item of clothing, footwear, education, medical care (institutional) and durable goods all other items (viz all food, pan, tobacco & intoxicants, fuel and light, miscellaneous goods and services including non-institutional medical care, rents and taxes) reference period last 30 days and last 365 days last 30 days The 5 Infrequent-expenditure categories - clothing, footwear, education, medical care (institutional) and durable goods will be referred to as I-type categories in this report MPCE (U30) and MPCE (M): Apart from a reference period of last 30 days which was used to collect data on all items of, an additional reference period of last 365 days was used for 5 item groups: clothing (and bedding), footwear, education, medical care (institutional) and durable goods. Discussion of the basic results of the survey uses data collected with last 30 days as reference period for all items of as has been the usual practice in the quinquennial rounds. But, for each sample household, the overall level

13 6 Chapter Two of living indicator or MPCE has also been worked out using the estimates based on the reference period of the last 365 days for those categories for which such data had been collected. This gives an alternative figure for MPCE of each household. This alternative MPCE is referred to in this report as MPCE (M). The MPCE based on the uniform reference period of last 30 days for all items is referred to as MPCE (U30), or simply MPCE Adjusted MPCE: Occasionally, MPCE (M) (see paragraph 2.11 above) has been referred to as MPCE after adjustment or adjusted MPCE, while MPCE (U30) has been referred to as unadjusted MPCE Major States: This refers to the 17 States of India which had a population of 20 million or more according to the Census of The States are: Andhra Pradesh, Assam, Bihar, Chhattisgarh, Gujarat, Haryana, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Orissa, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal. Together, these States accounted for nearly 94.7% of India s population in The coverage of various categories of items used in presenting the results of the survey in this report is explained in alphabetical order of items below. CATEGORIES OF CONSUMPTION ITEMS Barley products: This includes sattu prepared by frying and powdering of barley. Beverages, etc.: This stands for beverages, refreshments and processed food. It includes tea, coffee, mineral water, soft drinks, fruit juice (not prepared at home), green coconut water, soda water, other beverages such as cocoa, biscuits, cakes, pastries, pickles, sauce, jam, jelly, and other salted refreshments and sweets not prepared at home. Refreshments prepared at home are not included here. Instead, the ingredients of the refreshments (such as flour, sugar, milk, etc.) are accounted under cereals (e.g. against wheat ), sugar, etc. Food purchased in the form of cooked meals is also included in processed food. Cereals: Note that household of cereals does not include of cereals by livestock belonging to the household. Such expenditure, being part of farm expenditure, is excluded from household consumer expenditure altogether. Cereal substitutes: Cereals are usually a person's staple food in India. But sometimes, by choice or due to scarcity, a person may consume little or no cereal. The food requirement is partially or wholly met in such cases by of food items which could be treated as substitutes for cereals. Tapioca, for example, is consumed in some parts of the country as a substitute for cereals. Similarly, jackfruit seed, mahua, etc. are also consumed as substitute for cereals. Potato or sweet potato consumed as substitutes for cereals are not, however, shown here. These are included in vegetables. Clothing: The term clothing is used in this report as a short form of clothing and bedding. Besides clothing proper, it includes bedding (pillows, quilts, mattresses, mosquito nets, etc.), as well as rugs, blankets, curtains, towels, mats, cloth for upholstery, etc. It excludes footwear and raincoats. Expenditure on tailor-made clothing excludes tailoring charges, which are accounted in consumer services. Consumption of an article of clothing is considered to take place when it is brought into first use. However, clothing purchased

14 Chapter Two 7 second-hand is considered as consumed as soon as it is purchased. Imported ready-made garments, even if purchased second-hand, are shown as first-hand purchase. Livery supplied by the employer is taken into account in household of clothing even if used during duty hours only. Conveyance: This includes expenditure incurred on account of journeys undertaken and/or transportation of goods made by any means of conveyance. The expenditure is the actual fare paid except in case of railway season tickets, for which expenditure is calculated as the cost of the ticket divided by the number of months for which it is valid. Expenditure on journeys undertaken by household members as part of official tours is not considered as consumer expenditure of the household. But journeys to commute to and from place of work are included here. The expenditure incurred on journeys undertaken under Leave Travel Concession, etc., even if reimbursed, is included. In case of owned conveyance, the cost of fuel (petrol, mobile oil, diesel, etc.) for power-driven transport and animal feed for animaldrawn carriage is considered. Durable goods: Items included here all have a lifetime of one year or more. However, some petty durables such as spectacles, torches, locks, umbrellas, etc., are excluded. Note that glassware, earthenware and plastic goods such as buckets are excluded from durable goods and included in other household consumables. Consumption expenditure on durable goods includes both expenditure on purchase and expenditure on repair and construction of household durables. For land and residential building, only expenditure on repair and construction is included. Durable goods include furniture and fixtures, entertainment durables such as radios, TV, VCR/VCP/DVD players, tape recorders and CD players, cameras, musical instruments, jewellery and ornaments, crockery and utensils, cooking and other household appliances such as fans, air conditioners, air coolers, sewing machines used for household work, washing machines, stoves, pressure cookers, fridges, water purifiers, electric irons, heaters, toasters and ovens, household transport equipment including twowheelers, four-wheelers and their parts, therapeutic appliances, clocks, watches, computers for household use, mobile phone handsets, and bathroom and sanitary equipment. Edible oil: Edible oils used for toilet purpose by the household are not included here. Oilseeds are sometimes purchased or grown by a household for extracting edible oil (by crushing) for. The value of oilseeds so used is included in edible oil. Education: This includes expenditure on goods purchased for the purpose of education, viz., books and journals, newspapers, paper, pen, pencil, etc., and also magazines, novels and other fiction. It also includes fees paid to educational institutions (e.g., schools, colleges, universities, etc.) on account of tuition and other fees like game fees, library fees, etc., and payment to private tutors. Expenditure on Internet other than telephone charges is included here. Occasional payments to the school fund made on account of charities, and donations generally, are not included here, as they are regarded as transfer payments. Entertainment: This includes expenditure on cinemas, theatres, melas, fairs and picnics, expenditure incurred on processing, developing, etc., of photographic film, charges paid for hiring of video cassette/vcr/vcp, and charges for viewing a video show. Expenses incurred on subscription to dish antenna, cable TV facilities, etc. are also included. Club fees are included here. Footwear: This includes charges paid to a cobbler for getting a pair of shoes or other footwear made. It excludes the cost of straps purchased separately.

15 8 Chapter Two Gram: This includes gram products such as sattu obtained by frying and powdering of gram (whole grain). Besan made out of gram is, however, not included here, but in other pulse products. Maize products: This includes cornflakes, popcorn, etc., made of maize. Medical expenses: This includes expenditure on medicine of different types and on medical goods; also, payments made to doctor, nurse, etc., as professional fees and those made to hospital, nursing home, etc. for medical treatment, and expenditure incurred for clinical tests, including X-rays, ECG, pathological tests, etc. Expenditure on all family planning appliances is included. Medical: institutional and non-institutional expenditure: The distinction between institutional and non-institutional medical expenses lies in whether the expenses were incurred on medical treatment as an in-patient of a medical institution (institutional), or otherwise (non-institutional). Medical institution here covers private as well as Government institutions such as hospitals and nursing homes. Milk and milk products: Milk products include ghee, butter, curd, etc. Milk used in home preparation of sweetmeats, etc., is also accounted here. This category also includes those baby foods of which the principal constituent is milk. Further, milk (liquid) includes icecream of which the major component is milk. Ice with syrup but without milk sold under the name of ice-cream is not included in this category. Minor personal effects: These include spectacles, torches, locks, umbrellas, raincoats, gas lighters, etc. In the consumer expenditure schedule, this group was called goods for personal care and effects. These are not included in durable goods but in miscellaneous goods and services. Miscellaneous goods and services: This is a residual category covering all items other than food, pan, tobacco, intoxicants, fuel and light, clothing, footwear, and durable goods. It includes, among other things, expenditure on education, medical care, entertainment, conveyance, rent, and consumer taxes and cesses. (Note, however, that in Schedule 1.0, the schedule of enquiry of data collection, education and institutional medical care are separated out from the miscellaneous goods and services block to form a separate block.) Other consumer services: This includes expenditure on domestic servants, cooks, attendants, sweepers, barbers and beauticians, laundry, ironing, tailors, priests, legal services, telephone charges, postal charges, grinding charges, and repair charges for nondurable goods. Apart from conveyance, it excludes the consumer services coming under entertainment. Other household consumables: These include electric bulbs, tubelights, batteries, earthenware, glassware, plastic goods such as buckets, water bottles and feeding bottles, coir and rope, washing soap, washing soda, other washing requisites, incense, room fresheners, flowers, acid and insecticides. In the consumer expenditure schedule, this group was called sundry articles. Pan: This includes, pan (betel leaves), supari, lime, katha, other ingredients of finished pan, and pan purchased in finished form.

16 Chapter Two 9 Rent: Rent includes house and garage rent, residential land rent and other consumer rent. Rice products: Rice products are foods like chira, khoi, lawa, muri, rice powder, etc. which are obtained by splitting, frying, powdering, or parching of the grain. Spices: Consumption of garlic and ginger, which in the schedule appear under vegetables, is accounted in spices and not in vegetables. Green chillies are, however, included in vegetables. Vegetables: This excludes ginger and garlic, which have been included in the estimates of of spices, though data for ginger and garlic were collected in the schedule under vegetables. Wheat products: Bread is included here, but not wheat preparations like biscuits, cakes, etc., which are accounted in beverages, refreshments and processed food.

17 Chapter Three Basic Results on Per Capita Consumption Expenditure LEVEL OF CONSUMPTION The main indicator of standard of living generated by the NSS consumer expenditure survey is Monthly Per Capita Consumer Expenditure (MPCE). This is easy to understand at the national or State (or region) level the aggregate consumer expenditure of the relevant population divided by the population size. Nations may be ranked by per capita consumer expenditure, just as they may be ranked by per capita gross domestic product. In the NSS consumer expenditure survey, MPCE is defined first at the household level, that is, household MPCE = aggregate monthly consumer expenditure of the household household size. It is possible to derive the proportions of either households or persons located in these households in different class-intervals of MPCE, and averages of MPCE of these groups of households. The NSS thus helps provide, not just the average MPCE at any level of geographical disaggregation, but the distribution of households, or persons, by size of MPCE around the average level. Such distributions (and the ranking of households in ascending order of MPCE) are used to derive the standard indicators of poverty such as proportion of population below poverty line or indices of inequality such as Lorenz ratio. These distributional indicators derived from the NSS data constitute important measures of welfare Reference period: It was mentioned earlier (Chapter 2, paragraph 2.11) that, for five categories of non-food expenditure (relatively infrequent purchase categories or the I-type for short), the schedule of enquiry used two reference periods of data collection last 30 days and last 365 days. The purpose was partly to investigate the differences in data produced by these two different reference periods. A more important purpose was to keep the methodology of the 61 st round survey the same as that of the 50 th round ( ) consumer expenditure survey, with which its results could be compared. This double reference period resulted in two different and alternative values of monthly expenditure being available for these items. Most importantly, household MPCE, or monthly per capita expenditure on all items of put together, also had two alternative values depending on which reference period was used for the five I-type categories In the past, whenever the NSS collected data on any item group with two reference periods from each surveyed household, last 30 days was always one of the reference periods used, and the major findings were released using a reference period of 30 days for such item groups. Moreover, the results of the 50 th round survey of , which belongs to the quinquennial series 4 of full-scale consumer expenditure surveys, and which uses exactly the same reference period structure as the 61 st round, were released using a reference period of 30 days for all items. Comparability of the survey results with past data thus dictates that the basic results of this survey be based on the last 30 days reference period for all items. This chapter will generally use, for the 61 st round, the data collected with 30 days reference period for all items of unless otherwise stated. A problem remains with the last round of the quinquennial series, the 55 th, in which only data with 365 days 4 The smaller-scale surveys, which are not part of this series, are said to form the annual series.

18 Chapter Three 11 reference period was collected for the I-type categories. For precise comparison of MPCE with the 55 th round, therefore, it has been necessary, at times, to use the MPCE (M) of the 61 st round instead of the usual MPCE or MPCE (U30) (see paragraph 2.11). 3.1 MPCE and household size The consumer expenditure schedule recorded age and sex particulars of each member of the sample household. From these, it is possible to generate estimates of population by age and sex, sex ratio, average number of adults and children per household, etc. For this report, the most important demographic parameter is average household size. Table P2 shows that this decreases steadily as one moves up the MPCE scale. The variation in average household size over different MPCE classes is mainly accounted by variation in the average number of children (persons under 15 years of age) in the classes, with the number of adults per household varying much less. Table P2: Average number of adults and children per household in different MPCE classes all-india rural urban MPCE class (Rs.) av. no. per household of adults MPCE class (Rs.) av. no. per household of adults children* persons children* persons & more & more all classes all classes *persons under As a matter of fact, one may say that it is the larger proportion of dependants, on the average, in the households with more children that, by lowering the proportion of earning members, makes the MPCE of these households lower. Larger households are, on the average, poorer; it follows that poorer households are, on the average, larger Figure 1 shows, among other things, that among households of different sizes, it is the single-member households that are, on the average, the richest. Again, this is not surprising when one considers that, except for a small proportion of remittance-receiving households, these households have one earner and no dependants; larger households are much less likely to have no dependants. Growth in the number of 2-member urban households with both members having significant earnings is probably the reason for the average MPCE of 2- member households being very close to that of single-member households in urban India.

19 12 Chapter Three Fig 1 Average MPCE for households of sizes 1 to Average MPCE (Rs.) household size Rural Urban A consequence of the difference in household size between poor and rich households is that for any characteristic which is associated, positively or negatively, with level of living, the percentages of households possessing the characteristic, and the percentage of persons possessing the characteristic, tend to differ appreciably. For example, the percentage of population in households using solid fuel for cooking would be higher than the percentage of such households, because the use of solid fuel is relatively rare among richer households but very common among the poorer households, which are, on the average, larger Details of the estimated distribution of households by household size, for each MPCE class in each State/UT, separately for rural and urban India, are given in Table 2 of Appendix A. Statement 3 (pages 48-49) gives results at State/UT level in summary form, that is, not giving separate estimates for households in different MPCE classes. 3.2 Distribution of population by MPCE For each State and Union Territory, as well as for India as a whole, Statement 2R (page 46) gives the distribution of rural population over 12 MPCE classes. Statement 2U (page 47) does the same for the urban population. These MPCE class-intervals are used in all the tables in this report as also in other reports on employment and unemployment based on Schedule Note that the MPCE class limits for the rural and urban tables have been chosen differently. This is because of the wider range of variation in MPCE in urban area compared to rural areas The MPCE classes for the rural sector were, in fact, so formed that the first two and the last two classes each contained about 5% of the rural population according to the present (61 st round) survey, and the remaining classes each contained about 10%. The classes for the urban sector were formed similarly. 6 5 Schedule 10 is the NSS schedule on employment and unemployment. 6 This is not the practice followed in every NSS consumer expenditure survey, but only for the larger-scale surveys of the quinquennial series (see also paragraph 1.0.4), of which the 61 st round survey is one. In the next few rounds, the classes formed in the 61 st round will be used for classification. New classes will again be formed in the next round of the quinquennial series, to be retained till the next such round, and so on.

20 Chapter Three Figures 2R and 2U show the all-india percentages of rural and urban population below different levels of MPCE. The levels of MPCE chosen are the class limits of the 12 MPCE classes. The graphs may be used to find the approximate percentage of population below any specific level of MPCE, including the poverty line. They may also be used to find such population parameters as the median MPCE and other percentiles of the size distribution of MPCE Glimpses of poverty and economic well-being Some glimpses of economic deprivation, as available from the MPCE distributions for the 17 major States, are presented in Table P3 below. State Table P3: Statewise percentages of rural and urban population below specified levels of MPCE percentage of rural population with MPCE below Rs.365 ( Rs.12 per day) below Rs.270 ( Rs.9 per day) State percentage of urban population with MPCE below Rs.580 ( Rs.19 per day) below Rs.395 ( Rs.13 per day) Orissa Bihar Chhattisgarh Orissa Madhya Pradesh Uttar Pradesh Bihar Chhattisgarh Jharkhand Madhya Pradesh Uttar Pradesh Rajasthan Karnataka 32 7 Jharkhand Maharashtra Andhra Pradesh 33 8 Tamil Nadu 26 6 Karnataka Andhra Pradesh 25 8 West Bengal 29 8 West Bengal 24 5 Tamil Nadu 26 7 Gujarat 21 5 Maharashtra 25 8 Assam 17 3 Assam 23 4 Rajasthan 17 3 Kerala 22 7 Haryana 7 1 Haryana 22 7 Kerala 7 2 Punjab 18 1 Punjab 4 1 Gujarat 16 3 All-India All-India Rural: The MPCE level of Rs.365 was roughly the 30 th percentile of the all-india distribution of MPCE for the rural population in , and Rs.270 was the 10 th percentile. Compared with 30 per cent at the all-india level, in Orissa and Chhattisgarh as many as 55-57% of villagers were, in , living below the MPCE level of Rs.365, which is about Rs.12 per day. In MP, Bihar and Jharkhand, 46-47% were living below this level. Even lower levels of living of Rs.270 per person per month (Rs.9 per day) and below were observed in 31% of the rural population in Orissa and over 20% in Chhattisgarh and MP (compared to 10% at the all-india level) Urban: For urban India, Rs.580 was roughly the 30 th percentile of the distribution of MPCE and Rs.395 was the 10 th percentile. Table P3 shows that 55% of Bihar s and 50% of Orissa s urban population lived below the MPCE level of Rs.580 (Rs.19 per day). Even lower levels of living of Rs.13 per day or less (MPCE<Rs.395) were visible among 28% of Bihar s and 25% of Orissa s urban population.

21 14 Chapter Three Fig 2R Percentage of rural population below different MPCE levels 100 cumulative % of rural population MPCE (Rs.) Fig 2U Percentage of urban population below different MPCE levels cumulative % of urban population MPCE (Rs.) The upper ranges of the MPCE distributions, likewise, give a view of the proportion of people living in relative affluence, as the figures below show. In Table P4, Rs.690 and Rs.890 are, respectively, approximate values of the 80 th and 90 th percentiles of the all-india distribution of MPCE of the rural population, that is, the MPCE levels above which the top 20% and top 10% of the rural population of India lived in Rs.1380 and Rs.1880 are the approximate values of the corresponding percentiles for the population of urban India.

22 Chapter Three 15 Table P4: Statewise percentages of rural and urban population above specified levels of MPCE State percentage of rural population with MPCE at least Rs.690 at least Rs.890 State percentage of urban population with MPCE at least Rs.1380 at least Rs.1880 Kerala Kerala Punjab Punjab Haryana West Bengal Gujarat Gujarat Andhra Pradesh Maharashtra Rajasthan Haryana Maharashtra Tamil Nadu Tamil Nadu Karnataka West Bengal 18 8 Assam 21 9 Assam 18 5 Andhra Pradesh 18 8 Uttar Pradesh 17 8 Jharkhand 17 8 Karnataka 13 6 Chhattisgarh 16 8 Madhya Pradesh 11 5 Rajasthan 15 7 Orissa 9 4 Madhya Pradesh 14 7 Chhattisgarh 8 3 Uttar Pradesh 12 6 Jharkhand 7 3 Orissa 8 3 Bihar 6 2 Bihar 7 3 All-India All-India Average MPCE Average MPCE at State level for rural and urban sectors is shown below for the major States and all-india and is also shown in Figure 3, which groups States by broad range of average rural MPCE and average urban MPCE. Table P5: Average MPCE in rural and urban areas of major States and all-india State av. MPCE (Rs.) State av. MPCE (Rs.) rural urban rural urban Andhra Pradesh Madhya Pradesh Assam Maharashtra Bihar Orissa Chhattisgarh Punjab Gujarat Rajasthan Haryana Tamil Nadu Jharkhand Uttar Pradesh Karnataka West Bengal Kerala All-India It is worth mentioning that the average MPCE of a State or of the country, as a whole, changes very gradually from year to year, and sample surveys conducted in quick succession, such as the NSS consumer expenditure surveys, may fail to accurately capture the extent of change, owing to sampling fluctuations. Now, while the sample size permitted by resources available for an NSS survey is generally adequate to provide a very good estimate of the level of average MPCE at national level, it is always less effective in providing an estimate of the change in MPCE over successive years. This is especially so at State level.

23 16 Chapter Three Fig 3 Average MPCE in different States and Union Territories