Household Consumption Expenditure Survey (HCES) Report

Source-This post on HCES Report has been created based on the article “Consumption inequality up in rural areas of 11 states in past decade: HCES” published in “Livemint” on 10 June 2024.

Why in News?

Recently, the Household Consumption Expenditure Survey (HCES), released its report. It showed that consumption inequality increased in rural areas of 11 states despite a national trend.

About Key Findings

i) The Gini coefficient increased in rural areas of 11 states between 2011-12 and 2022-23.

ii) States Affected: The states where the Gini coefficient rose include Bihar, Chhattisgarh, Jharkhand, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Himachal Pradesh, and Rajasthan.

iii) Nagaland, Jharkhand, Maharashtra, Rajasthan, Meghalaya, Chhattisgarh has witnessed increase in Gini coefficient.

iv) The Gini coefficient for consumption expenditure also rose in urban areas of three states which are Meghalaya, Himachal Pradesh, Manipur.

v) Nationally, the Gini coefficient for rural areas declined from 0.283 in 2011-12 to 0.266 in 2022-23. For urban areas, it decreased from 0.363 to 0.314 during the same period.

Note: A lower Gini coefficient indicates reduced spending inequality.

About Gini coefficient

i) Gini coefficient is an indicator of income or wealth inequality and is derived from the Lorenz curve.

ii) It is measured by dividing area between perfect equality curve and actual income distribution curve by area under perfect equality curve.

iii) The coefficient ranges from 0 (0%) to 1 (100%), with 0 representing perfect equality (where every resident in a country has the same income) and 1 representing perfect inequality (one resident earned all income and the rest earned nothing).

UPSC Syllabus: Indian Economy