Economy News

CONSUMER EXPENDITURE SURVEY (CES)

Written by Talent KAS

Related Topic in KAS Prelims Syllabus:

Economy and Planning [Paper-II]: Indian Economy in post reform period

News

  • In view of “data quality issues”, Ministry of Statistics and Programme Implementation had decided not to release the results of the all-India Household Consumer Expenditure Survey conducted by the National Statistical Office (NSO) during 2017-2018.
  • Central government also announced that it was “separately examining the feasibility of conducting the next Consumer Expenditure Survey (CES) in 2020-2021 and 2021-22 after incorporating all data quality refinements in the survey process”.

What is the CES?

  • It is traditionally a quinquennial (recurring every five years) survey.
  • It is designed to collect information on the consumption spending patterns of households across the country, both urban and rural.
  • The data gathered in this exercise 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.

Significance

  • 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.
  • It is an invaluable analytical as well as forecasting tool.
  • It will help 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 used by the government in rebasing the GDP and other macro-economic indicators.

Critical Aspects

  • Central government’s decision to withhold the survey’s findings deprives policymakers of invaluable contemporary consumption data that would have helped drive their intervention strategies.
  • The next survey’s findings (2020-21 or 2021-22) would end up coming after 9 or 10 years, after the 2011-12 survey.
  • As a subscriber to the IMF’s Special Data Dissemination Standard (SDDS), India is obliged to follow good practices in four areas in disseminating macroeconomic statistics to the public.
  • These comprise the coverage, periodicity, and timeliness of data; public access to those data; data integrity; and data quality.
  • IMF’s ‘Annual Observance Report’ for 2018 have already flagged concerns about India’s delays in releasing economic data and the decision to withhold the survey risks the country falling out of its SDDS obligations.
[Source: The Hindu]

 

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