Rural Consumption Growth Narrows Urban-Rural Gap, Says Household Survey

The Ministry of Statistics has reported a continued rise in rural consumption, narrowing the urban-rural consumption gap in India during 2023-24. According to the household consumption survey released on Friday, the urban-rural disparity in monthly per capita consumption expenditure (MPCE) reduced to 70% in 2023-24, from 71% in 2022-23 and 84% in 2011-12.

The survey found the average MPCE in rural India at ₹4,122 and ₹6,996 in urban areas during 2023-24, excluding the value of free items received through welfare programs. Including these items, rural MPCE rose to ₹4,247, while urban MPCE reached ₹7,078.

Rising Consumption in Rural India

In nominal terms, rural MPCE rose by 9% in 2023-24, compared to an 8% increase in urban areas. The largest rise occurred among the bottom 5-10% of the population, reflecting a shift towards equitable economic growth. Non-food items remained the largest contributor to household expenditure, comprising 53% of rural and 60% of urban MPCE.

Food expenditure saw major allocations for beverages, refreshments, and processed foods in both rural and urban households. Non-food spending included conveyance, clothing, entertainment, and durable goods. Urban households also spent 7% on rent-related expenses.

Declining Consumption Inequality

The Gini coefficient for rural areas dropped from 0.266 in 2022-23 to 0.237 in 2023-24, while urban inequality declined from 0.314 to 0.284. These figures reflect reduced consumption inequality across India.

The survey collected data from 2,61,953 households nationwide between August 2023 and July 2024. This includes 1,54,357 rural and 1,07,596 urban households. The findings indicate growing income levels, enabling people to spend more on non-essential goods after meeting food expenses.

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