For the first time, the average monthly per capita consumption expenditure (MPCE) of agricultural households has fallen below the overall average of rural households, according to the latest Household Consumption Expenditure Survey (HCES) 2022-23 released by the National Sample Survey Office (NSSO) on Saturday.
The survey report shows that the average MPCE of families “self-employed in agriculture” was Rs 3,702 in 2022-23 (August-July), while the overall average of rural households was Rs 3,773.
The gap between the MPCE of agricultural families and the overall average of rural households has been narrowing over the years. In 1999-2000, the MPCE of agricultural families was Rs 520, while the overall average of rural households was Rs 486. In 2004-05, the MPCE of agricultural households was Rs 583, while the overall average of rural households was Rs 559. In 2011-12, the MPCE of agricultural households was Rs 1,436, a little more than the average rural spending of Rs 1,430.
Like the households “self-employed in agriculture”, the MPCE of casual labourers and regular wage earners engaged in agriculture was also lower than the rural average, according to the HCES 2022-23.
The average MPCE of households with “regular wage/ salaried earning in agriculture” was Rs 3,597, while that of households with “regular wage/ salaried earning in non-agriculture” was Rs 4,533. Similarly, the average MPCE of households engaged in “casual labour in agriculture” was Rs 3,273, as compared to Rs 3,315 for “casual labour in non-agriculture”.
“The average MPCE for casual labour in agriculture and self-employed in agriculture are at the tail end. And the latter, for the first time, is lower than the rural household average of Rs 3,773. This implies that the latter has not kept pace with other groups. It is, therefore, an opportunity to take a deep dive into data and come out with a suitable policy instrument,” Rama Kamaraju, a former senior consultant with NITI Aayog, said.
According to an economist, one of the possible reasons could be the diversification of the rural economy, with non-agricultural activities gaining prominence.
Citing another possible reason, another economist said some of the migrant labourers who returned to their villages during Covid-19 may have stayed back and taken up agriculture, increasing the total number of those “self-employed in agriculture”. The average MPCE of households “self-employed in agriculture” could be below the overall rural average due to this increase in the number of farmers, he said.
The MPCE is a key indicator used for measuring poverty. The fall in the average MPCE of agricultural households as compared to overall rural households is significant in view of farm protests in recent years – over the now repealed farm laws in 2020-21, and the ongoing agitation demanding legal guarantee of the minimum support price (MSP).
The HCES factsheet also provides data on the “MPCE estimates with imputation”, in which the value of items like rice, wheat/atta, jowar, bajra, maize, ragi, barley, small millets, pulses, gram, salt, sugar, edible oil, laptop/PC, tablet, mobile handset, bicycle, motorcycle/ scooty, clothing (school uniform), footwear (school shoe etc) received free of cost through various social welfare programmes has been imputed.
The average MPCE with imputation for agricultural households (Rs 3,783) was still lower than the overall average for rural households (Rs 3,860).
The latest survey report also shows that in rural areas, Scheduled Tribes (STs) reported the lowest MPCE at Rs 3,016, while it was Rs 3,474 for Scheduled Castes (SCs), Rs 3,848 for Other Backward Classes (OBCs), and Rs 4,392 for others.
In urban areas, SCs reported the lowest MPCE at Rs 5,307, followed by Rs 5,414 for STs, Rs 6,177 for OBCs, and Rs 7,333 for others. Overall, the average MPCE was Rs 3,773 for rural households, and Rs 6,459 for urban households.
While the HCES is held in a gap of five years, the government did not release the survey results of its 75th round for July 2017-June 2018, saying there was a significant variation in the levels in consumption pattern as well as in the direction of change. The survey that was leaked had shown a decline in consumption expenditure.
The HCES collects information on consumption of goods and services by households. The new survey results have come after a gap of over 10 years since the government scrapped the 2017-18 survey.
