<p>The Consumer Price Index (CPI), which measures retail inflation, has been called for its current weights to be revised in light of the findings of the Household Consumption Expenditure Survey 2022–2023. The Household Consumption Expenditure Survey’s primary result is that both urban and rural people are spending less per capita on food products.</p>
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<p>The average monthly expenditure in rural areas on food products decreased from 53% of total spending in 2011–12 to 42% in 2022–2023 according to the survey. The monthly expenditure on food products in urban areas decreased from 43% in 2011–12 to 39% in 2022–2023. In rural regions, the percentage of people who consume cereal has decreased from 11% in 2011–12 to 5% in 2022–23, while in urban areas, it has decreased from 6.67% to 3.64%.</p>
<p>Food and drink now account for 36% of the Consumer Price Index in urban regions and 54% in rural ones. Cereal weights are 9.67% in urban areas and 12.35% in rural areas, respectively. Analysts think there is a compelling rationale for changing the weights assigned to the various categories of goods and services in the CPI in light of the most recent results of the Household Consumption Expenditure Survey.</p>
<p>The current CPI weights will eventually be updated to reflect the changed consumption patterns of urban and rural households thanks to this study. The CPI data won’t be updated for some time, however, according to Emkay Global Financial Services head economist Madhavi Arora. Arora states that before the CPI index is revised, consecutive surveys must be finished.</p>
<p>It is anticipated that the second survey will be finished in July 2024. Furthermore, the new CPI series could not be available for another year after that, given the time it takes to assemble the figures and make the necessary adjustments.</p>
<p>Arora claims that the rural economy has continued to urbanize over the last ten years, with a smaller proportion of food in consumers’ consumption baskets than non-food items (including cereals). “We observe that the food share experienced a reversal trend from 2009 to 2010 (growing), but it has since continued to decline,” adds Arora.</p>
<p>The poll indicates that over the last ten years, there has been a significant decline in the monthly per capita consumption expenditure (MPCE) disparity between urban and rural areas. In 2022–2023 the urban MPCE was R6,459, 71% more than the rural MPCE of Rs 3,773. The disparity was 84% of rural MPCE in 2011–12.</p>
