India’s household consumption survey captures predictable changes

livemint.com:

A fact sheet for the Household Consumption Expenditure Survey (HCES) 2022-23 has been released by India’s statistics ministry. The full report with unit-level data is awaited. It covered roughly 100,000 urban and 150,000 rural households, implying that our urban population is two-fifths of the total.

This estimate is based on census classification, but the 2021 comprehensive census is delayed by five years. So we may be under-estimating the urban population. If so, it might give a distorted picture of the urban-rural divide.

For instance, if better-off consumption numbers are taken as being in rural areas when they should be counted as urban, it would show the rural economy doing better than it actually is. And the census definition of what constitutes ‘urban’ may be too conservative anyway. The point, however, is not to be dismayed by relatively slower growth in rural incomes or consumption, but rather to focus on reducing urban squalor and improving urban infrastructure and governance.

Rapid urbanization and a concomitant widening of the rural-urban divide are inevitable consequences of high growth. It is the cities which produce the bulk of jobs and act as a magnet for migrants. But their governance, fiscal capacity and infrastructure fall short of the public resources they need.

The consumption surveys conducted in India are among the largest in the world and known for their rigour and regular frequency. Their data ought to be available every five years or so. But the 2017-18 survey was suppressed by the government on claims of poor quality.