In FY24, rural consumption beats urban; inequality down
Indicating a slowdown in consumption in urban regions, monthly per capita expenditures (MPCE) have seen a higher rise in rural areas compared to urban areas, a survey by the Statistics Ministry revealed on Friday. However, it highlighted that inequality in rural areas has come down.
According to the latest edition of the Household Consumption Expenditure Survey, The average MPCE in rural and urban India in 2023-24 has been estimated to be ₹4,122 and ₹6,996, respectively excluding the values of items received free of cost by households through various social welfare programmes. While MPCE grew by 9 per cent in rural areas, it was 8 per cent in urban areas. The survey results are based on data collected from 2.61 lakh households in rural areas and over 1 lakh in urban areas.
Narrowing gap
“The urban-rural gap in MPCE has narrowed to 71 per cent in 2022-23 from 84 per cent in 2011-12. It has further reduced to 70 per cent in 2023-24, confirming sustained momentum of consumption growth in rural areas,” a statement by the Statistics Ministry said. This is excluding the values of items received free of cost through various social welfare programmes,Consumption inequality, measured in terms of the Gini Coefficient, declined in both rural and urban areas. “The Gini coefficient has fallen to 0.237 in 2023-24 from 0.266 in 2022-23 for rural areas and to 0.284 in 2023-24 from 0.314 in 2022-23 for urban areas,” the statement said. The Gini coefficient statistically quantifies consumption inequality and wealth distribution within a society.
During the period under consideration, across all the States and UTs, households were observed to have spent more on non-food items with the share of non-food items in average MPCE being 53 per cent and 60 per cent in rural and urban areas, respectively. The major contributors to the non-food expenditure of the households were conveyance, clothing, bedding & footwear, miscellaneous goods & entertainment and durable goods durable goods.
“Rent with a share of around 7 per cent is another major component of households’ non-food expenditure in urban India,” the statement said. In terms of food items, as of 2022-23, beverages and processed food remain the major contributors to total consumption expenditure of food items in 2023-24, followed by milk & milk products and vegetables.
Among the States, MPCE is the highest in Sikkim (Rural-₹9,377 and Urban-₹13,927) and it is the lowest in Chhattisgarh (Rural- ₹2,739 and Urban-₹4,927).
The rural-urban difference in average MPCE among the States is the highest in Meghalaya (104 per cent) followed by Jharkhand (83 per cent) and Chhattisgarh (80 per cent). Average MPCE in 9 out of 18 major states is higher than the all-India average MPCE in both rural and urban areas.
