Diverse Consumption Behaviour Between Rural and Urban India

CEIC India Data Talk - April 15, 2014 - According to the 68th round of the Household Consumer Expenditure Survey, rural India's average Monthly per Capita Expenditure (MPCE) rose to INR 1,278.94 in 2012, while that of urban India stood at INR 2,399.24, depicting a rural-urban divergence of approximately 87.6%. Notwithstanding this, MPCE grew slightly faster in rural India, by 37.86% since 2010, compared to the 34.35% increase in urban India. The Household Consumer Expenditure Survey is officially a quinquennial survey but published on ad hoc intervals according to the available financing by the National Sample Survey Office (NSSO), an organisation under the Ministry of Statistics and Programme Implementation (MOSPI). The data are compiled through interviewing large random samples of representative households across the nation. In the latest survey, 7,649 villages and 5,268 urban blocks were covered, where a total of 101,662 households participated. Data from the 68th survey highlighted the significant rural-urban disparities in consumption patterns. While food expenses, on average, accounted for nearly half of the total expenditure of rural Indians, at 48.63% of MPCE in 2012, the corresponding figure for the urban population was roughly 10% lower, at only 38.47%. Despite rural Indians spending a higher percentage of their MPCE on food, this has been on the decline across rural and urban India. During 1978, food expenditure accounted for 64.35% and 59.98% of total household expenditure for the rural and urban populations respectively. There were also considerable variations in spending on non-food articles among sectors. For instance, rent and education expenditure constituted 6.96% and 5.66% of the urban sector’s MPCE respectively, whereas the corresponding figures for the rural sector were just 0.49% and 3.12%. Also noteworthy are the substantial inter-state disparities in consumption expenditure. In 2012, Lakshadweep had the highest MPCE among rural India, at INR 2,926.03, followed by Kerala and Goa, which stood at INR 2,509.92 and INR 2,458.24 respectively. Meanwhile, MPCE was just INR 880.24 in the rural sector of Orissa, around three times lower than Lakshadweep. On the other hand, within the urban sector, Andaman and Nicobar Islands enjoyed the highest MPCE at INR 4,547.27, followed by Chandigarh at INR 3,351.52 and Haryana at INR 3,253.29. The lowest MPCE was recorded in the urban sector of Manipur at INR 1,393.53. Comparing the latest results with the previous round reveals that all states, regardless of rural or urban, have experienced positive growth in MPCE in 2012, with the sole exception being the urban sector of Chandigarh, where MPCE plummeted by 19.29%. The Household Consumer Expenditure Survey provides much more than consumption expenditure data per se. Indeed, thanks to the national coverage of the survey, MPCE is an effective tool to gauge India’s standard of living. Coupled with sector-wise and state-wise breakdowns, this dataset allows analysts and researchers to gain important insights into the well-being of different regions in India and the inequalities therein. By Yan Ting Hin - CEIC Analyst Discuss this post and many other topics in our LinkedIn Group (you must be a LinkedIn member to participate). Request a Free Trial Subscription. Back to Blog
15th April 2014 Diverse Consumption Behaviour Between Rural and Urban India

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