India - Household Consumer Expenditure Survey: 64th Round, Schedule 1.0, July 2007 - June 2008

2011-05-23

Introduction:

The survey is part of the 64th round of NSS conducted from 1.7.2007 to 30.6.2008

The 64th round (July 2007-June 2008) of NSS covered the subjects of 'Employment-Unemployment and Migration', 'Participation and expenditure in Education' and 'Household Consumer Expenditure'.

Period of survey and work programme:

The period of survey was from 1st July 2007 to 30th June 2008. The survey period was divided into four sub-rounds of three months' duration each as follows:

sub-round 1 : July - September 2007

sub-round 2 : October - December 2007

sub-round 3 : January - March 2008

sub-round 4 : April - June 2008

In each of these four sub-rounds equal number of sample villages/ blocks (FSUs) was covered to ensuring uniform spread of sample FSUs over the entire survey period.

Household Consumer Expenditure

The 64th round survey is the nineteenth in the annual series of surveys of household consumer expenditure.. Household consumer expenditure was 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.

Expenditure Approach

For items of consumption other than food, pan, tobacco, intoxicants, clothing, bedding, footwear, and fuel for cooking and lighting, the expenditure approach is followed to identify the consuming household and the time at which consumption takes place.

The expenditure approach says that consumption of these items takes place when expenditure is incurred on the item (good or service). The household incurring the expenditure is the consuming household, regardless of whether the item is used by the household or not.

When a household H obtains an item as gift or charity, or by free collection, no expenditure is incurred by the household H on the item.

When a household W obtains an item as perquisite from the employer, or as payment in kind from a household or enterprise for services rendered by W, then W is considered to incur an expenditure on the item received as perquisite or payment in kind. The value of the item at local retail prices is considered to be the amount of expenditure incurred by W. Examples are accommodation, newspapers and telephone services provided free to employees by employers, and any expenses on domestic account, such as medical expenses, that are reimbursed by employers. Leave Travel Concession (LTC) is another example of perquisites. The time of consumption will be the time of acquisition of the perquisite if it is a good (e.g. newspapers) and the time of use if it is a service (e.g. telephone facility).

When a household H acquires an item through cash purchase, the time of incurring expenditure is clear. In case of payment by cheque or through a credit card, the household is considered to incur expenditure at the moment when the cheque is handed over or the credit card is presented to the seller as means of payment. If the seller agrees to accept payment in instalments, it is called hire purchase. In case of hire purchase, only the payment made to the seller during the reference period (see paragraph 5.0.5) is regarded as the expenditure incurred. Note that in case of purchase (e.g. of a car) fully financed by a loan from some person or enterprise other than the seller, where full payment is made to the seller, the entire sale value of the commodity (the principal borrowed to make the payment to the seller) is considered to be the expenditure incurred by the household. This expenditure (payment to the seller) takes place before the durable comes into the buyer's possession, not after. On the other hand, the repayment of the loan in instalments to the financier goes on for several months or years.The repayment of the loan to the financier is not relevant in recording consumer expenditure.

Procedure for recording payments for education and rent of household dwelling regularly made by another household: It is not uncommon for a person's rent or educational expenses to be regularly paid by a household different from his own, directly to the provider of the accommodation or educational services. A common example is a student in a hostel. Such a person's rent and educational fees are often paid by his or her parents' household directly to the hostel authorities. Here, going by the expenditure approach would mean that the (regularly occurring) consumption of accommodation or educational services would not be accounted in the user household. Here, as a departure from expenditure approach normally applicable to rent and educational expenses, the Use Approach is to be followed. Here the household making use of the accommodation or the educational goods and services is to be considered as the consuming household, and not the household making the payment. This procedure is being introduced for the first time.

Summary of rules to determine the consuming household and the time of consumption

FOOD, PAN, TOBACCO, INTOXICANTS, FUEL FOR COOKING AND LIGHTING: Use Approach (Exception: (a) Food cooked and served to non-household members: Preparing household is consumer (b) Meals purchased from market and served to guests or as charity: Purchasing household is consumer) CLOTHING, BEDDING & FOOTWEAR: First Use Approach (Exception: Second-hand purchase of clothing & footwear: Consumed at the moment of second-hand purchase) OTHER ITEMS: Expenditure Approach (Exception: Rent and education payments regularly made by another household: Follow Use Approach)

Reference period: This is the period of time to which the information collected relates. It may vary from item to item. The reference periods to be used during the present survey for different groups of consumption items are given below:

Srl. no. Item Reference period

1 education, medical (institutional), clothing, bedding, footwear and durable goods 'last 365 days'

2 all other items (viz., all food, pan, tobacco, intoxicants, fuel, miscellaneous goods and services including non-institutional medical, rents and taxes) 'last 30 days' Sample survey data [ssd]

Household and Persons