Household Consumer Expenditure, July 2005 - June 2006

NSS 62nd Round

The National Sample Survey Organisation (NSSO) has been set up by the Government of India in 1950 to collect socio-economic data employing scientific sampling methods. The NSSO conducts regular consumer expenditure surveys as part of its "rounds", each round being normally of a year's duration and covering more than one subject of study. The surveys are conducted through household interviews, using a random sample of households covering practically the entire geographical area of the country. Surveys on consumer expenditure are being conducted quinquennially on a large sample of households from the 27th round (October 1972 - September 1973) onwards. Apart from these quinquennial surveys, the NSSO collected information on consumer expenditure from a smaller sample of households since 42nd round (July 1986 - June 1987). Nowadays every round of NSS includes a consumer expenditure survey (CES), giving rise to an annual series of consumption data. The 62nd round survey is the seventeenth in the annual series of surveys of household consumer expenditure. It was conducted during July 2005 to June 2006. Household consumer expenditure is measured as the expenditure incurred by a household on domestic account during a specified period, called reference period. It includes the imputed values of goods and services, which are not purchased but procured otherwise for consumption. In other words, it is the sum total of monetary values of all the items (i.e. goods and services) consumed by the household on domestic account during the reference period. The imputed rent of owner-occupied houses is excluded from consumption expenditure. Any expenditure incurred towards the productive enterprises of the households is also excluded from household consumer expenditure.

The word "consumption" is used in different senses. The main reason for this is that some items can be used only once while others can be used repeatedly. A household consumer expenditure survey, therefore, needs to assign different meanings to consumption for different items. The NSS traditionally uses three different definitions or approaches to consumption of different items: Consumption approach, Expenditure approach and First-use approach. Items of consumption have been classified into four groups. The Consumption approach is used for Group I, the First-use approach for Group II and the Expenditure approach for Groups III and IV. The four groups of items are:

Group I: Items of food other than 'cooked meals*', pan, tobacco and intoxicants and fuel and light: Consumption is the actual consumption during the reference period. Both quantity and value of such consumption are collected.

Group II: Items of clothing and footwear: An item is consumed if it is brought into first use during the reference period. The item may or may not be procured within the reference period. It can be procured through purchase or home production, or as gift or charity. Both quantity and value are collected.

Group III: Durable goods: Any expenditure incurred on an item for purchase or towards cost of raw materials and services for its construction and repair during the reference period is treated as consumption of the item.

Group IV: Cooked meals; Miscellaneous goods and services including education, medical, rent, taxes and cesses: Any expenditure incurred on the item during the reference period is treated as consumption of the item. Consumption is recorded in value terms only.

The household consumer expenditure schedule used for the survey collected information on quantity and value of household consumption with a reference period of "last 30 days" for some items of consumption and "last 365 days" for some less frequently purchased items. To minimise recall errors, a very detailed item classification was, as usual, adopted to collect information. The schedule also collected some other household particulars including age, sex and educational level of each household member.

The field work for the survey was conducted, as usual, by the Field Operations Division of the Organisation. The collected data were processed by the Data Processing Division of NSSO and tabulated by the Computer Centre of Department of Statistics. The reports have been prepared by Survey Design & Research Division (SDRD) of NSSO under the guidance of the Governing Council, NSSO.