Bridging the Consumption Gap in India’s Statistics

India’s two principal measures of household consumption: (1) Private Final Consumption Expenditure (PFCE) from the national accounts and (2) Household Consumption Expenditure Survey (HCES) from NSSO, have diverged steadily over time. PFCE aims to capture the total economic value of goods and services consumed by households, including imputed value of items for which market price is not available, in-kind transfers, and expenditures by Non-Profit Institutions Serving Households (NPISHs), whereas HCES records only out-of-pocket household spending. The gap between the two has risen from about 5 per cent in 1972–73 to nearly 54 per cent in 2023–24, raising concerns about the reliability of consumption-based measures of poverty, inequality, and welfare. Using a combination of historical series and the latest 2023–24 data, this paper decomposes the divergence into conceptual and methodological components and provides a component-level comparison of food and non-food consumption. We show that while both sources point to a similar structural shift from food to non-food spending, they differ sharply in levels and composition because of differences in coverage, valuation, and the treatment of institutional and imputed value of certain consumption items. The paper highlights the role of NPISHs, imputed components, and the underrepresentation of high-income households in sustaining the gap, and sets out a statistical agenda spanning survey design, national accounts parameters, and NPISH measurement to improve the coherence of India’s consumption statistics

Bridging (networking · Consumption (sociology · Descriptive statistics · Goods and services · National accounts · Private consumption · Survey data collection · Value (mathematics · Economics of Agriculture and Food Markets · Income, Poverty, and Inequality · Social and Economic Development in India