With new consumption survey, the need for new indices

La Excellence IAS Academy

With new consumption survey, the need for new indices

Current Affairs Daily Editorials

La Excellence IAS Academy | March 12, 2024 | Indian Polity

Syllabus: GS-III, Subject: Economy, Topic: Growth and Development, Inclusion, Issue: Analysis of Household Consumption Expenditure Survey (HCES), 2022-23.

Context: Recently released HCES-2022-23

  1. A) Analyzing the changes in poverty line as per HCES using different methodology
  • Tendulkar methodology: decline in poverty ratios from 2011-12 to 2022-23.( total poverty 6.3% in 2022-23)
  • State Bank of India report: Rural poverty declines from more than 25% to nearly 7% and urban poverty from around 14% to around 4%%.
  • Rangarajan Method: Overall poverty ratio (2022-23) is estimated at around 10%.
  1. B) Implications of the HCES 2022-23 for the Consumer Price Index (CPI)
  • Decline in monthly per capita expenditure on food items and increase in non-food items has an implication for CPI index weightage.
  • Monetary policy committee may need to work with a new price index reflecting changing consumption patterns.

Source: Indian Express

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