The Centre is planning to launch the Consumer Expenditure Survey (CES) with a revised methodology for the upcoming financial year, five years after the previous survey was shelved due to quality issues.
The CES data is used to calculate poverty and inflation levels, as well as to track economic progress in rural and urban India. The consumption survey is used to finalise the weights for price indices and the survey year is fixed as the base year for most macro-economic indicators.
Speaking to the Mint, Pronab Sen, former chief statistician of India, who chaired a committee to revise the methodology for CES, said the survey was originally planned for July 2020, but was delayed due to the Covid-19 pandemic. "We were planning to launch the next CES in the current financial year. The pilot survey started in February. The thought was to launch the survey in July 2020. That’s out of question. Let’s see if we could launch it in July 2021," he said.
The previous CES in FY18, which was scrapped due to quality issues, may have impacted the quality of inflation data due to the outdated base year. A leaked report of the FY18 survey published in 2019 showed the average amount of money spent by a person fell by 3.7% to Rs 1,446 per month in FY18 compared to FY12, marking the first such fall in more than four decades, primarily driven by muted rural demand.
The new survey will be held at a time when the government and the Reserve Bank of India (RBI) will be reviewing the inflation targeting framework.
In a report released last year, the World Bank had said that the government's decision to not release the 75th round of the CES left an important gap in understanding the poverty situation in India, South Asia, and the world in recent years.