The estimates of private consumption expenditure are generated
in India by two agencies, viz. Central Statistical Organisation (CSO)
and National Sample Survey Organisation (NSSO). CSO estimates in National Account
Statistics (NAS) are obtained using commodity flow approach, while NSSO estimates
are based on Household Consumption Expenditure Surveys (HCES). The studies comparing
two sets of estimates done earlier revealed that the gap between the two sets
of estimates was widening over time. The present study is an exploration into
the group level differences among the estimates and their contribution to the
overall differences in the years 1972-73, 1977-78, 1983-84 and 1993-94, based
on the earlier conducted studies. In 1972-73 and 1977-78 the major groups,
which showed the difference, include ‘food grains’, ‘fuel and
light’ ‘sugar and gur’, ‘fruits and vegetables’
‘transport’ and ‘recreation education and cultural services’.
In 1993-94 the major contributors towards the divergence between the estimates
of expenditure were ‘fruits and vegetables’, ‘transport’
and ‘clothing and foot wear’. The important factors, which lead to
the divergence, include the differential implicit prcices of the consumer goods,
varied reference periods, differences in the classification schemes, differences
in the estimation procedure followed by two agencies, inclusion of notional elements
in NAS estimate and possible discrepancy in the official and directly reported
information. JEL Classification : E01, E21
Keywords : Consumption, National Accounts Statistics, Household
Consumption Expenditure Survey Introduction
In India, the private consumption expenditure is mainly estimated by the two Government
organizations, viz., Central Statistical Organisation (CSO) and National
Sample Survey Organisation (NSSO), following two entirely different methodologies.
The estimates of Private Final Consumption Expenditure (PFCE) are compiled annually
as apart of the National Account Statistics (NAS) by CSO using commodity flow
approach. This approach makes use of the estimates of quantum and value of different
commodities produced and available, flowing finally into the consumption process
of houses and the private Non-Profit Institution Serving Household (NPISH) during
the accounting year, which is generally the financial year. The sum of the commodity-wise
estimates gives the aggregate estimates of the PFCE. On the other hand, NSSO estimates
are based on Household Consumption Expenditure Surveys (HCES), which are conducted
in every five years with a much larger sample and annually with a relatively thin
sample. In this sample survey, the consumption expenditure of a random sample
of households is ascertained directly by canvassing a well-designed schedule of
enquiry. Even though HCES directly does not provide the countrywide total consumption
expenditure, the NSSO estimate of total household consumption expenditure of the
domestic economy can be obtained as the product of estimates of annual per capita
consumption expenditure and the population projections based on the population
census. Traditionally private consumption expenditure estimated by the
two agencies differed. Factors attributed to the differences include coverage,
reference time frames and concepts and methods of estimation in the very approaches
employed by the two agencies. In the past, several attempts were made to compare
the two sets of estimates. The studies comparing estimates in the disaggregate
level - Minhas et. al., (1986) and Minhas (1988; with 1972-73 and 1977-78
estimates), Minhas et. al., (1990; with the estimates of 1983) and NSSO-CSO
(2005; with estimates of 1993-94) - revealed that the gap between the two sets
of estimates was widening over time. The study by Sundaram and Tendulkar (2001)
also strengthened the results from the above-mentioned articles. The present paper
is a survey to explore into the widening gap of these estimates at group level
based on the studies by Minhas et. al. (1986), Minhas (1988), Minhas
et. al. (1990) and NSSO-CSO (2005). The paper is organised as follows.
Section I presents the details of the methodological differences at the aggregate
level. Item-group level differences of the selected common items are worked out
and presented in Section II across four time points, viz., 1972-73, 1977-78,
1983-84 and 1993-94 and analyzed in detail. Concluding remarks are presented in
Section III. Section I Methodological
Differences at the Aggregate Level Minhas (1988) had done a
comprehensive analysis of the limitations in comparing the two estimates. NSSO-CSO
(2005) also discussed the matter in a detailed manner. Discussed below is a brief
description of the differences in coverage, time periods, and concepts and estimation
procedure adopted by two organisations in reaching their respective estimates
of consumption expenditure. Coverage The HCES of NSSO
excludes the houseless and the institutional population while the consumption
of these persons is included in the NAS estimates. Also included in the NAS estimates
is the consumption expenditure of non-profit institutions serving households (NPISH),
which are not covered in HCES. This limitation is virtually of no consequence
as proportion of houseless and institutional population in the total population
is negligibly small. The share of NPISHs in the estimate of PFCE, owing to absence
of data, are also believed to be small (NSSO-CSO, 2005). Time Period
For HCES, the NSSO normally uses an agriculture year as the survey period.
The NAS estimates, on the other hand, are compiled for the financial year. The
data on the agricultural production used for national accounting, however, pertain
to the agriculture year. The comparability will not be seriously affected by this
factor, if the output of food crops of two successive years doesn’t differ
much. Otherwise, the magnitude of discrepancy accounted for the difference in
the time frames of NAS and NSSO estimates are to be assessed (Minhas et. al.,
1986). Estimation Procedure The NSSO collects the detailed
item-wise consumption data in quantity and value terms for the last 30 days (365
days for durable items) from sample households by interviewing the head of the
household. The survey period usually is divided into four sub rounds of 3 months
duration each, to overcome the seasonal effects. The CSO consumption estimates
are based on the production data of various consumer goods and services, which
are compiled basically for the net domestic product for India. These are adjusted
for exports and imports, intermediate services and changes in stock, to arrive
at the availability of various goods and services for final consumption.
Inclusion of Notional Elements Among the differences, the notional
components in the NAS estimate, however, accounts for a substantial part of the
divergence between the two estimates. Only the rent on dwellings actually paid
is included in the NSSO estimate, while the NAS estimate includes all imputed
rentals of owner-occupied dwellings. Other such notional component in the NAS
estimate is the Financial Intermediation Services Indirectly Measured(FISIM).
This is being included in PFCE since the 1980-81 series of national accounts.
Official Records versus Directly Reported Consumption The
NAS consumption estimates for various consumer goods are based on the official
data of production, exports and imports, which lead to deliberate under recording
of production of certain items. On the other hand, consumers are likely to report
the purchases of all such items irrespective of whether or not their production
was entered into records of the enterprise (Minhas, 1988). Unmatched
Classification Schemes There are many differences in the classification
scheme of the two data sets. As discussed in the subsequent section, it can be
seen that these differences are significant. Some of the differences cited in
Minhas (1988) and also the NSSO-CSO (2005) are mentioned below. Prior
to 1980-81 series of NAS, the expenditure on hotels and restaurants was classified
under non-food consumer services, while it was included in the food group in the
NSSO estimate. Since 1980-81 it was included in food group for NAS estimates also.
In NAS estimates, rice retained by farmers are put entirely under rice consumption,
whether or not part of it are converted into rice products. But in the NSSO estimate,
rice products are not included in estimates of rice. Expenditure on purchase and
repairs of transport and equipment is classified as durables in NSSO estimates,
while it is included in the transport group in PFCE. The expenditure on cooked
food given to domestic servants is included under food group in the NSSO. In the
NAS, on the other hand, all payments given to the domestic help are taken as expenses
incurred for consumption of personal expenses.
Section
II Item-Group Level Differences of the Selected
Common Items Before examining the differences at micro level,
let briefly elaborate the trend of aggregate differences. As per Table 1, quoted
from the studies undertaken earlier, it can be noted that the gap between the
two sets of estimates had been widening progressively. For example, 5.5 per cent
difference in 1972-73 increased to 10.4 per cent in 1977-78; which further went
up to 25.6 per cent and 38.1 per cent, respectively in 1983-84 and 1993-94.
That is within a period of two decades the per cent difference increased almost
seven fold. A divergence to this extent is indeed beyond expectations, taking
into account that the NSSO estimates are based on quinquennial surveys and conducted
on a larger sample. Examination of subgroup level differences and their
contribution to overall differences, based on the studies mentioned earlier is
fraught with some difficulties due to the grouping of the items under different
heads. Minhas (1988) has aggregated the expenditure into nine broad groups under
food and non-food categories. In NSSO-CSO (2005), there are 18 groups under food
while the non-food category contains 10 groups. One of the major differences in
the classification schemes followed by Minhas, et. al. (1986) and NSSO-CSO
(2005) is that, the latter classifies pan, tobacco and beverages under food while
Minhas, et. al. (1986) classifies it under non-food. However, for the
present study, only those groups that contributed significantly towards the divergence
in the estimates of total consumption expenditure are included.
Table
1: Divergence between NSSO and NAS estimates (Rs. crore) |
Year | Source | Total
Expenditure | 1 | 2 | 3 |
1972-73 | NSSO | 33210 |
| NAS | 35160 |
| Per
cent difference | -5.5 |
1977-78 | NSSO | 56530 |
| NAS | 63080 |
| Per
cent difference | -10.4 |
1983 -84 | NSSO | 108668 |
| NAS | 146084 |
| Per
cent difference | -25.6 |
1993-94 | NSSO | 355770 |
| NAS | 574772 |
| Per
cent difference | -38.1 |
Per cent difference = (NSSO-NAS)/NAS
expressed in percentage. Source : NSSO-CSO (2005). |
Food Grains The NSSO estimate of expenditure
on food grains was considerably higher than NAS in 1972-73. The difference decreased
in 1977-78. In 1983-84, the NAS estimate was found to be higher and the difference
increased further in 1993-94. As per Table 2, the per cent contribution of
food grain consumption expenditure to the total consumption expenditure was declining
over the years for both NSSO and NAS estimates. This reflected the changing pattern
of food grain consumption in the overall consumption basket of the people,
as against the increase in per capita income. In 1972-73, the difference in the
NSSO and NAS estimates of food grain consumption expenditure was –1.6 times
than that of the difference of total consumption expenditure. In other words,
the actual difference in the estimates of food grain consumption expenditure was
more than that of the difference in the total consumption expenditure. The negative
sign indicates that, when in total consumption expenditure, NAS estimate was more
than NSSO estimate, the food grain consumption estimate was more in NSSO. The
contribution of the difference in NSSO and NAS estimates of food grain consumption
expenditure to the total consumption expenditure was 2.1 per cent in 1993-94.
As argued by Minhas (1988), it is apprehended that adjustments for seeds, feeds
wastages and other assumptions about certain ratios in NAS framework may had lead
to systematic under estimation of private consumption of food grains in the CSO
data set in 1972-73 and 1977-78. Since the subgroup of cereals and pulses have
major shares in total consumption expenditure, it is necessary to undertake a
comparison for cereals and pulses consumption.
Table
2: Difference2 in the food grain consumption expenditure in NSSO
and NAS estimates | Year
| Per cent
difference of NSSO and NAS stimates@ | Per
cent contribution food grain Expenditure(NSSO) to total(NSSO)# | Per
cent contribution of food grain expenditure(NAS) to total(NAS)$ | Per
cent contribution of the food grain difference in expenditure
to total difference* | 1
| 2 | 3 | 4 | 5 |
1972-73 | 29.5 | 40.4 | 29.5 | -156.7 |
1977-78 | 9.9 | 34.1 | 27.8 | -26.6 |
1983-84 | -1.0 | 31.5 | 23.7 | 0.9 |
1993-94 | -5.0 | 24.2 | 15.7 | 2.1 |
2 @ Per cent difference = (NSSO-NAS)/NAS,
expressed in percentage. # Per cent contribution NSSO = NSSO sub group /NSSO,
expressed in percentage. $ Per cent contribution NAS = NAS sub group/NAS,
expressed in percentage. * Per cent contribution difference =(NSSO sub
group- NAS sub group)/(NSSO-NAS), expressed in percentage. The similar
notion is followed in all other Tables. | Table 3 gives
a comparison of NSSO and NAS estimates of consumption expenditure of cereals.
It also provides the per cent contribution of the difference in the cereals consumption
expenditure, to the difference in total consumption expenditure estimated by NSSO
and NAS. The NSSO estimate for the cereals consumption expenditure was
more than NAS estimate in 1972-73, 1977-78 and 1983-84, but it got reversed in
1993-94. Also the per cent contribution of cereals consumption expenditure to
the total consumption expenditure was declining over the years for both NSSO and
NAS estimates. In 1972-73 the difference in the NSSO and NAS estimates of cereals
consumption expenditure was –1.3 times than that of the difference in the
total consumption expenditure, which means that the actual difference in the estimates
of cereals consumption expenditure was more than that of total consumption expenditure.
The NAS estimates of the cereals was naturally on the lower side owing the exclusion
of other rice products from the NAS estimates. The contribution to the difference
in NSSO and NAS estimates of cereals consumption expenditure to the difference
in total consumption expenditure was only 2.5 per cent in 1993-94. In
contrast to cereals, the contribution of pulses to total consumption expenditure
had not witnessed any remarkable change
Table
3: Difference in the cereals consumption expenditure in |
| NSSO
and NAS estimates |
| Year | Per
cent difference of NSSO and NAS Estimates | Per
cent contribution of Subgroup Expenditure (NSSO) to total(NSSO) | Per
cent contribution of Subgroup Expenditure (NAS) to total(NAS) | Per
cent contribution of the subgroup difference(NSSO-NAS) to total difference |
1 | 2 | 3 | 4 | 5 |
1972-73 | 27.7 | 35.9 | 26.5 | -132.3 |
1977-78 | 10.8 | 29.9 | 24.2 | -25.2 |
1983-84 | 0.9 | 28.1 | 20.7 | -0.8 |
1993-94 | -7.1 | 20.3 | 13.5 | 2.5 |
even though it reduced marginally (Table 4). The per cent difference
between the NSSO and NAS estimates had came down over the years. But it still
had a difference of 26 per cent in 1993-94. Another noticable feature is that,
for pulses NSSO estimate was always more than that of NAS estimate. The higher
value of the NSSO estimate for pulses was due to higher implicit price in NSSO
estimate and downward bias of NAS value estimate (NSSO-CSO, 2005). Sugar
and Gur This item-group had shown consistently significant difference
between the two sets of estimates of consumption expenditure for all the years
compared. Table 5 provides the details of the difference between the estimates
of sugar and gur over the years. The difference between the NSSO and NAS estimates
of sugar and gur consumption expenditure was significantly on the higher side
in all the four years. In 1972-73, 52.6 per cent of the difference shown in the
total consumption expenditure was due to the difference in consumption expenditure
on this item-group. Since then, the per cent contribution to the total difference
had decreased significantly. This was due to the fact that the total difference
in the consumption expenditure between the two estimates had widened considerably
over the years. The major factors responsible for the inter-agency difference
in the estimate for the group as a whole, as per the earlier studies, were the
low ratio of intermediate consumption of sugar and gur used for deriving the NAS
estimates, under reporting of consumption of sugar and gur in HECS and over estimation
of sugarcane production.
Table
4: Difference in the pulses consumption expenditure in NSSO
and NAS estimates | Year | Per
cent difference of NSSO and NAS estimates | Per
cent contribution of subgroup
expenditure (NSSO) to total
(NSSO) | Per
cent contribution of subgroup
expenditure (NAS) to total (NAS) | Per
cent contribution of the subgroup
difference (NSSO-NAS) to total
difference | 1 | 2 | 3 | 4 | 5 |
1972-73 | 55.0 | 3.8 | 2.3 | -22.7 |
1977-78 | 38.9 | 3.5 | 2.2 | -8.4 |
1983-84 | 30.9 | 3.1 | 1.7 | -2.1 |
1993-94 | 26.4 | 3.3 | 1.6 | -1.1 |
Table
5: Difference in the sugar and gur consumption expenditure in
NSSO and NAS estimates | Year | Per
cent difference of NSSO and
NAS estimates | Per
cent contribution of item-group
expenditure (NSSO) to total (NSSO) | Per
cent contribution of item-group
expenditure (NAS) to total (NAS) | Per
cent contribution of the item-group
difference (NSSO-NAS) to total
difference | 1 | 2 | 3 | 4 | 5 |
1972-73 | -45.4 | 3.7 | 6.4 | 52.6 |
1977-78 | -38.3 | 2.7 | 3.9 | 14.5 |
1983-84 | -54.2 | 2.7 | 4.4 | 9.4 |
1993-94 | -49.9 | 2.8 | 3.5 | 4.5 |
Milk For milk and milk products consumption, it
can be seen from Table 6 that the per cent difference between NSSO and NAS estimates
was about 28 per cent in 1993-94, which was below 10 per cent in 1972-73 and 1977-78.
In 1983-84 it was showing a difference of 35 per cent. The contribution of the
difference in the estimates of milk and milk products consumption expenditure
to the total difference was lowest at 1993-94 even though the actual difference
was remarkably high (Table 6). The difference in the estimates of consumption
expenditure between two agencies was mainly due to the overestimation of consumption
of milk products by CSO. One reason for this could be the assumption regarding
the part of milk used for butter and lassi production. This could infact be used
as intermediate consumption in enterprises producing commodities like tea and
coffee, hotel and restaurant services and sweets shops, consumption of which were
estimated separately in the NAS (NSSO-CSO, 2005).
Table
6: Difference in the milk and milk products consumption expenditure
in NSSO and NAS estimates | Year | Per
cent difference of NSSO and NAS
estimates | Per
cent contribution of item-group
expenditure (NSSO) to total (NSSO) | Per
cent Contribution of item-group
expenditure (NAS) to total (NAS) | Per
cent Contribution of the item-group
difference (NSSO-NAS) to total
difference | 1 | 2 | 3 | 4 | 5 |
1972-73 | -5.8 | 7.9 | 7.9 | 8.2 |
1977-78 | -9.1 | 8.4 | 8.3 | 7.3 |
1983-84 | -35.1 | 8.1 | 9.2 | 12.7 |
1993-94 | -27.6 | 9.5 | 8.1 | 5.9 |
Edible Oils Table 7 provides the details regarding
the difference in the consumption expenditure of edible oils. The per cent difference
in the estimates by two agencies was found to be widening. The contribution of
this difference to the total difference, however, had came down to a level of
3.4 per cent in 1993-94. For this item-group, the estimates of both quantity
and price differed widely. The difference in the quantity consumed could be due
to the consumption of vanaspati and edible oils used in hotels and restaurants,
which were included in NAS consumption expenditure but excluded from NSSO estimate
(NSSO-CSO, 2005).
Table
7: Difference in the edible oils consumption expenditure in NSSO
and NAS estimates | Year | Per
cent difference of NSSO and NAS
estimates | Per
cent contribution of item-group
expenditure (NSSO) to total (NSSO) | Per
cent Contribution of item-group
expenditure (NAS) to total (NAS) | Per
cent Contribution of the item-group
difference (NSSO-NAS) to total
difference | 1 | 2 | 3 | 4 | 5 |
1972-73 | -12.2 | 3.9 | 4.2 | 9.2 |
1977-78 | -27.1 | 3.9 | 4.9 | 12.7 |
1983-84 | -38.8 | 4.2 | 5.1 | 7.8 |
1993-94 | -32.5 | 4.4 | 4.0 | 3.4 |
Fruits and Vegetables The NSSO estimate on the consumption expenditure
of this item-group was always found to be considerably lower than the corresponding
NAS estimate. The per cent contribution of the difference in the estimates of
this group was found to be very high in 1972-73 (64.7 per cent). Even though this
value had declined, the difference between two sets of estimates had increased
(Table 8). The item specific estimates from the two sources reveal that
the difference between the estimates for this group was mainly due to the diverging
estimates of fruit consumption. Part of this big difference was due to classification
problem. On one hand, NAS estimate of fruit consumption appeared to be on higher
side, while on other hand NSSO estimate seemed to suffer from under estimation
due to the non-inclusion of after purchase wastages in HECS. In the case of vegetables,
not only the difference between the NSSO and NAS estimates were smaller but also
the former was higher than latter in 1993-94 (NSSO-CSO, 2005). Meat,
Fish and Egg This is another item-group for which the estimates
for 1993-94 from the two sources vary widely. In 1972-73 and 1977-78 the differences
between the two estimates as well as the contribution of the item-group difference
to the total difference were negligible. In 1983-84 the per cent difference rose
nearly to 27, which further increased to 45 per cent in 1993-94.
Table
8: Difference in the fruits and vegetables consumption expenditure
in NSSO and NAS estimates | Year | Per
cent difference of NSSO and NAS
estimates | Per
cent Contribution of item-group
expenditure (NSSO) to total (NSSO) | Per
cent contribution of item-group
expenditure (NAS) to total (NAS) | Per
cent contribution of the item-group
difference (NSSO-NAS) to total
difference | 1 | 2 | 3 | 4 | 5 |
1972-73 | -40.8 | 5.5 | 8.8 | 64.7 |
1977-78 | -41.5 | 5.7 | 8.8 | 35.0 |
1983-84 | -36.3 | 6.3 | 7.4 | 10.4 |
1993-94 | -57.6 | 8.1 | 11.8 | 17.9 |
The item-wise analysis reveals that this high level of discrepancy
in 1993-94 was mainly because of the differences in the items –‘chicken’,
‘egg and egg product’ and ‘fish’.The main reason for discrepancy
could be that the intermediate consumption for most of these items were taken
as nil in NAS, particularly for eggs and chicken, while large volumes of these
were actually used as input in the food processing industries, hotels and restaurants
(NSSO-CSO 2005). Tobacco This is yet another item-group
for which the NAS estimates had always been higher than NSSO estimates. The year-wise
comparison, provided in Table 10, reveals that the estimates for this item-group
were diverging further apart. The NSSO estimates were likely to be on
the lower side since the data collected through interviews were expected to be
adversely affected by under reporting resulting from inhibitions against consumption
of tobacco. Also the member from whom data was collected could be unaware about
the tobacco consumption habits of the other members of the household (NSSO-CSO,
2005).
Table
9: Difference in the meat fish and egg consumption expendi- ture
in NSSO and NAS estimates | Year | Per
cent difference of NSSO and NAS
estimates | Per
cent contribution of item-group
expenditure (NSSO) to total (NSSO) | Per
cent contribution of item-group
expenditure (NAS) to total (NAS) | Per
cent contribution of the item-group
difference (NSSO-NAS) to total
difference | 1 | 2 | 3 | 4 | 5 |
1972-73 | -2.6 | 2.7 | 2.6 | 1.2 |
1977-78 | -0.8 | 3.0 | 2.7 | 0.2 |
1983-84 | -26.7 | 3.2 | 3.2 | 3.4 |
1993-94 | -45.2 | 3.4 | 3.8 | 4.5 |
Table
10: Difference in the tobacco consumption expenditure in NSSO
and NAS estimates | Year | Per
cent difference of NSSO and NAS
estimates | Per
cent contribution of item-group
expenditure (NSSO) to total (NSSO) | Per
cent contribution ofitem-group expenditure
(NAS) to total (NAS) | Per
cent contribution of the item-group
difference (NSSO-NAS) to total
difference | 1 | 2 | 3 | 4 | 5 |
1972-73 | -45.2 | 1.9 | 3.2 | 25.9 |
1977-78 | -34.8 | 1.8 | 2.4 | 8.1 |
1993-94 | -52.3 | 1.7 | 2.1 | 2.9 |
Clothing and Footwear The NSSO estimate of clothing and
footwear had always been less than NAS estimate. In 1970s, the gap was low, but
grew wider in the later periods to reach a per cent difference of 39 in 1993-94.
The difference between the two estimates in this item-group was mostly due
to the difference in the clothing expenditure estimate, as it has the major share
in this item-group. Fuel and Light For this item-group, the
NSSO estimates of consumption expenditure were always high than that of NAS estimates
as it is indicated by the sign of the values in the first column in Table 12.
Table
11: Difference in the clothing and foot wear consumption expenditure
in NSSO and NAS estimates | Year | Per
cent difference of NSSO and NAS
estimates | Per
cent contribution of item-group
expenditure (NSSO) to total (NSSO) | Per
cent contribution of item-group
expenditure (NAS) to total (NAS) | Per
cent contribution of the item-group
difference (NSSO-NAS) to total
difference | 1 | 2 | 3 | 4 | 5 |
1972-73 | -9.9 | 7.5 | 7.8 | 14.0 |
1977-78 | -12.3 | 9.7 | 9.9 | 11.7 |
1983-84 | -37.0 | 9.4 | 11.0 | 16.0 |
1993-94 | -38.9 | 6.0 | 6.1 | 6.2 |
Table
12: Difference in the fuel and light consumption expenditure in
NSSO and NAS estimates | Year | Per
cent difference of NSSO and NAS
estimates | Per
cent contribution of item-group
expenditure (NSSO) to total (NSSO) | Per
cent contribution of item-group
expenditure (NAS) to total (NAS) | Per
cent contribution of the item-group
difference (NSSO-NAS) to total
difference | 1 | 2 | 3 | 4 | 5 |
1972-73 | 48.6 | 5.4 | 3.5 | -30.3 |
1977-78 | 61.8 | 6.1 | 3.4 | -20.0 |
1983-84 | 31.9 | 7.1 | 4.0 | -5.0 |
1993-94 | 14.7 | 6.9 | 3.7 | -1.4 |
The gap between the two estimates and the group level contribution
to the total difference as seen in Table 12, had progressively narrowed down from
62 per cent in 1977-78 to 15 per cent in 1992-93. Out of the difference
in the estimates for fuel and light, the item ‘other fuel’ - which
includes firewood and chips - accounted for the major portion of the difference
in all the years. Since 1980s, however, the per cent difference came down to a
large extent. This was mainly because, from 1980-81 NAS consumption expenditure
estimate on firewood was based on the consumption data available from HCES of
the NSSO. The reason for the differences in the electricity, LPG and kerosene
estimates was because of the fact that NAS estimates were obtained based on official
data and thus represented the prices set by regulatory authorities and NSSO estimates
were the prices actually paid by the consumers (NSSO-CSO, 2005). Furniture,
Furnishing, Appliances and Services For 1993-94, the NAS estimate
for this item-group was found to be substantially higher than the NSSO estimate.
In 1972-73 and 1977-78 also, the NAS estimate of this group was higher than NSSO
estimate, but the difference between the two was less pronounced (Table 13).
The subgroup ‘glassware tableware and utensils’ was the main
contributor towards the item-group level divergence between two sets of estimates
in 1993-94. In addition, the subgroup ‘services’ also contributed
to the difference in the group. The differences in this subgroup could be because
of the following reasons. The estimate of expenditure on non life insurance services,
which was considered by NAS, but was not included in HCES. The cooked meals served
to the domestic servants were not recorded as consumption of services in the HECS.
The wages paid in cash to the full time domestic servants, whom NSSO surveys treat
as household members were included in NAS estimate (NSSO-CSO, 2005).
Table
13: Difference in the furniture, furnishing, appliances and services
consumption expenditure in NSSO and NAS estimates |
Year | Per
cent difference of NSSO and NAS
estimates | Per
cent contribution of item-group
expenditure (NSSO) to total (NSSO) | Per
cent contribution of item-group
expenditure (NAS) to total (NAS) | Per
cent contribution of the item-group
difference (NSSO-NAS) to total
difference | 1 | 2 | 3 | 4 | 5 |
1972-73 | -35.0 | 2.0 | 2.9 | 18.0 |
1977-78 | -25.4 | 2.6 | 3.2 | 7.7 |
1993-94 | -65.9 | 1.7 | 3.1 | 5.3 |
Transport This was the one item-group that contributed
highest to the overall difference in the estimates in 1993-94. The difference
between NSSO and NAS estimates for this group was as high as 74 per cent in 1993-94.
Divergence between the estimates for this group had been high even in the past.
Table 14 provides the details of the divergence in the estimates in different
years. As evident from the table, the per cent difference as well as the per cent
contribution to overall difference was very large for this group across the years
compared. Since 1972-73, the per cent difference between two sets was
above 60. The item-wise analysis revealed that ‘transport services’
was one of the main contributors for the divergence between the estimates. The
difference in the estimates of taxi and auto rickshaw fare was so different that
the NSSO estimate was only about one- twentieth of the NAS estimate. In NAS, the
estimate of transportation was based on the total passenger earnings for each
mode and proportion of private consumption in total passenger earnings obtained
from official sources. Reliability of these proportions could be a source of divergence
in the estimates (NSSO-CSO, 2005). Another reason for the difference in the estimates
is the possibility of the under estimation of the conveyance charges in HCES (Minhas
1988). Also the NSSO estimate excluded the expenses incurred for official and
business purpose travels thus leaving aside the consumption of NPISHs. The item
‘transport equipment and operational costs’ also had a major share
in the divergence in the transport group estimates. This item includes expenses
for the purchase and repair of motor vehicles and parts, tyres and tubes, road
tax and cost for petrol and diesel. Recreation, Education and Cultural
services In all the years, for this item-group, the NAS estimates
were found to be higher than NSSO estimates (Table 15). The main contributor
to the divergence between two agency estimates was ‘education’. The
NAS estimate covers the expenses of the NPISHs on education and related activities.
Since NPISHs had fairly large share in educational activities, the NAS estimate
was found to be higher than that of NSSO.
Table
14: Difference in the transport consumption expenditure in
NSSO and NAS estimates | Year | Per
cent difference of NSSO and NAS
estimates | Per
cent contribution of item-group
expenditure (NSSO) to total (NSSO) | Per
cent contribution of item-group
expenditure (NAS) to total (NAS) | Per
cent contribution of the item-group
difference (NSSO-NAS) to total
difference | 1 | 2 | 3 | 4 | 5 |
1972-73 | -63.0 | 1.8 | 4.7 | 52.9 |
1977-78 | -71.0 | 2.0 | 6.1 | 41.4 |
1983-84 | -70.2 | 2.5 | 6.1 | 16.8 |
1993-94 | -74.3 | 4.4 | 10.6 | 20.6 |
Table
15: Difference in the recreation, education and cultural services
consumption expenditure in NSSO and NAS estimates |
Year | Per
cent difference of NSSO and NAS
estimates | Per
cent contribution of item-group
expenditure (NSSO) to total (NSSO) | Per
cent contribution of item-group
expenditure (NAS) to total (NAS) | Per
cent contribution of the item-group
difference (NSSO-NAS) to total
difference | 1 | 2 | 3 | 4 | 5 |
| | | | |
1972-73 | -57.0 | 1.8 | 4.0 | 41.0 |
1977-78 | -37.6 | 2.3 | 3.3 | 12.0 |
1993-94 | -33.0 | 3.3 | 3.1 | 2.7 |
In order to put the item-group level divergences together, Table
16 presents per cent difference between the two sets over two decades. Only those
item-groups that have shown significant difference in the estimated figures are
included in the table. It is observed that, almost all the item-group level estimates
are showing a diverging trend. Few exceptions include, food grain, fuel and light
and recreation, education and cultural services.
Table
16: Item-group level per cent differences |
Item-Group | 1972-73 | 1977-78 | 1983-84 | 1993-94 |
|
|
|
|
| 1 | 2 | 3 | 4 | 5 |
Food Grain | 29.5 | 9.9 | -1.0 | -5.0 |
Sugar and Gur | -45.4 | -38.3 | -54.2 | -49.9 |
Milk and Milk products | -5.8 | -9.1 | -35.1 | -27.6 |
Edible Oils | -12.2 | -27.1 | -38.8 | -32.5 |
Fruits and Vegetables | -40.8 | -41.5 | -36.3 | -57.6 |
Meat, Fish and Egg | -2.6 | -0.8 | -26.7 | -45.2 |
Tobacco | -45.2 | -34.8 | NA | -52.3 |
Clothing and Foot wear | -9.9 | -12.3 | -37.0 | -38.9 |
Fuel and Light | 48.6 | 61.8 | 31.9 | 14.7 |
Furniture, Furnishing, | | | | |
Appliances and Services | -35.0 | -25.4 | NA | -65.9 |
Transport | -63.0 | -71.0 | -70.2 | -74.3 |
Recreation, Education |
| |
| |
and Cultural services | -57.0 | -37.6 | NA | -33.0 |
Overall | -5.5 | -10.4 | -25.6 | -38.1 |
Per cent difference = (NSSO-NAS)/NAS
expressed in percentage. | Section
III Concluding Observations The discrepancy
in the estimates of total consumption expenditure for households provided by NAS
and NSSO was found to be increasing rapidly during the period considered. The
NAS estimates were found to be moving at a faster rate than that of NSSO estimates.
In this paper an attempt is made to examine the factors responsible for the divergence
between the two sets of estimates of consumption expenditure based on the different
studies undertaken earlier. Comparison of group-wise estimates of consumption
expenditure for the years 1972-73, 1977-78, 1983-84 and 1993-94 of NAS and NSSO
estimates presented in this paper looks into the change in the underlying factors
responsible for the divergence between two sets of estimates. In 1972-73 and 1977-78
the major groups contributed to the divergence in the total consumption expenditure
included ‘sugar and gur’, ‘fruits and vegetables’ ‘transport’
and ‘recreation education and cultural services’. In all these subgroups
NAS estimates were more than NSSO estimates by huge margins. In contrast, NSSO
estimates of ‘food grains’ and ‘fuel and light’ were remarkably
higher than NAS estimates. In the case of food grains the difference between the
estimates was even higher than the total difference. In 1993-94 the major contributors
towards the divergence between the estimates of expenditure were ‘fruits
and vegetables’, ‘transport’ and ‘clothing and footwear’.
Besides, the important factors, which lead to the divergence as per the earlier
studies include, the inclusion of notional elements like imputed rent and FISIM
in NAS estimate, differential implicit prices of the consumer goods, varied reference
periods (especially in 1972-73 and 1977-78), differences in the classification
schemes, differences in the estimation procedure followed by two agencies and
possible discrepancy in the official and directly reported information. References
NSSO-CSO (2005): ‘ Report On Cross Validation Study of Estimate of
Consumption Expenditure Available from Household Survey and National Accounts’,
Sarvekshana, 88th issue, Vol. XXV No.4 & XXVI No.1 Minhas,
B. S. (1988): ‘Validation of Large Scale Sample Survey Data –Case
of NSSO Estimates of Household Consumption Expenditure’, Sankhya,
Series B, Vol. 50, Part 3, Supplement. Minhas, B. S. and Kansal, S. M.
(1990): ‘Firmness, Fluidity and Margins of Uncertainty in the National Accounts
Estimates of Private Consumption Expenditure in the 1980s’, The Journal
of Income and Wealth, Vol. 12, No. 1. Minhas, B. S., Kansal, S.
M., Jagdish Kumar and Joshi, P. D. (1986): ‘On Reliability of the Available
Estimates of Private Consumption Expenditure in India’, The
Journal of Income and Wealth, Vol. 9, No. 2. Sundaram, K. and Tendulkar,
S. D. (2001): ‘NAS-NSS Estimates of Private Consumption for Poverty Estimation
– A Disaggregated Comparison for 1993-94’, Economic
and Political Weekly, Vol. XXXVI, No. 2. * The author is Research Officer
in the Department of Statistical An alysis and Computer Services, Reserve
Bank of India, Mumbai. He is extremely thankful to Dr. Abhiman Das, Assistant
Adviser, Department of Statistical Analysis and Computer Services, Reserve Bank
of India, Mumbai for his valuable suggestions and guidance. The views expressed
in this paper are purely personal and are not reflections of the Reserve Bank
of India to which author belongs. |