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The government is planning to launch the Consumer Expenditure Survey (CES) with a revised methodology for FY22, after the previous survey in FY18 was discarded due to data 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.

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 crisis. “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."

Sen said the survey will seek to address respondent fatigue during the two-and-a-half-hour interview.

“The whole problem with the CES was that it is too long. And the net result was that all the items other than food, the quality of data was poor because people were tired by the time they got to that. We decided to see whether we could split the questionnaire in three parts, canvass them separately and stitch them together. It requires three visits to the household. We did the first visit, then the lockdown happened. This will be the basis of the next CES if the pilot works out," he added.

But, can FY22 be considered as a normal year for conducting the survey, given that it will be just a year after the economy contracted at a record rate? Sen said both FY21 and FY22 could not be considered normal.

“And, how long can we delay it? Remember the current base year (FY12) is 10 years old. If we conduct it next year, you will get the results in January 2023, which means that the base revision can only happen in FY24," he added.

The consumption survey is used to finalize the weights for price indices and the survey year is fixed as the base year for most macro-economic indicators.

The earlier CES in FY18, which was scrapped, may have impacted the quality of inflation data due to the outdated base year. 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 the decision of the government not to release the 75th round of the CES leaves an important gap in understanding poverty in India, South Asia, and the world in recent years.

“The latest comprehensive household consumption expenditure survey data available for estimating poverty for India date to 2011/12, the 68th round of the National Sample Survey," it added.

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 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.

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