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Household Expenditure in India

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By IE&M Research

The National Sample Survey Office (NSSO) has released the report titled “Key Indicators of Household Expenditure on Services and Durable Goods” based on the related information collected during July, 2014 to June 2015. This survey on household expenditure on services and durable goods was the first focused survey of its kind undertaken by the National Sample Survey Office.

The survey was designed to collect some demographic particulars, detailed information on household expenditure on transport, miscellaneous consumer services, food expenditures incurred in hotel & restaurants, expenditure on repair & maintenance services availed, hotel lodging charges, and on durable goods other than those used exclusively for entrepreneurial activity in India through a nationwide household survey.

As household expenditure on services forms an important part of Private Final Consumption Expenditure (PFCE), this focused survey is expected to provide improved estimates of household expenditure on the services as compared to the same based on data collected through the usual Consumer Expenditure Survey. Also, in this survey, an attempt has been made to apportion the expenditure by the households on durable goods, when the durables are used both for household consumptions and enterprises.

The survey covered the whole of the Indian Union. Some key findings on various aspects of Household Expenditure on Services and Durable Goods in the country as obtained from the survey during July, 2014 – June, 2015 are as follows.

The monthly per capita expenditure on communication has seen a significant rise over last five years, with the expenditure in rural areas having increased by over 71 per cent from Rs 21.18 in 2009-10 and for urban areas by 48.7 per cent from Rs 68.91. So the communication services are the biggest unifying factor between the urban and rural population in India, with both sides of the divide having the highest monthly per capita expenditure on communication among the miscellaneous consumer services. During July 2014 to June 2015, the highest monthly per capita expenditure of rural households amounted to Rs 36.35 for communication services, while for urban households, it was Rs 102.46.

Bus / Tram is the most reported means of transport both in rural and urban areas. About 66% households in rural areas and 62% households in urban areas reported expenditure on this particular mode. The next most reported means of transport was Auto Rickshaw (about 38% rural households and about 47% urban households). Taxi, Railways and Rickshaw are the other major modes of transport both in rural and urban areas as reported by the households. Expenditures on Bus / Tram, Auto Rickshaw, Taxi and Train account for more than 90% of the total expenditure on Transport both in rural and urban areas. The expenditure share of railways as mode of transport contributes a much higher proportion in urban areas (12.54%) than that in rural areas (4.41%).

Among different modes of transport, monthly per capita expenditure (MPCE) on Bus/Tram is highest both in rural (43.43) and urban (94.89) India.

Under this miscellaneous group, 14 broad services were considered. These included domestic services, barber & beauty shops, TV & radio services, laundry, dry cleaning, etc., repair & maintenance, communication, religious services, recreational & cultural services, funeral/burial/cremation related services, business services, services incidental to transport, tailoring services and sewage disposal & sanitation, other services not elsewhere covered. In both rural and urban areas, about 90% or more households reported expenditure on barber & beauty shops and communication services.

In case of the budget share of different types of miscellaneous services in rural areas, communication services accounted for the highest share (25.33%) followed by barber & beauty shops (11.07%), TV & radio services (10.58%), repair & maintenance (10.27%) & tailoring services (10.18%). In urban areas, communication services again accounted for the highest share of budget (26.33%) followed by domestic services (12.11 %), TV & radio services (10.22%) and recreational & cultural services (9.95%). In terms of monthly per capita expenditure (MPCE) also, highest expenditure was found on communication services amounting to 36.35 and 102.46 in rural and urban areas respectively.

In rural area, the share of budget spent on a particular durable group with reference to the total expenditure on durables is highest for transport equipment (about 83%), when the purchase was done mainly for using it for an enterprise purpose.

SOURCEShabahat Manzoor A.
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