Rural-Urban Spending Inequality Drops in 2023-24, Survey Shows

India has seen a notable decline in spending inequality between rural and urban areas, as well as among different social categories, according to the latest Household Consumption Expenditure Survey released on Thursday.

Conducted by the Ministry of Statistics and Programme Implementation (MoSPI) between August 2023 and July 2024, the survey indicates that non-food items continued to drive the majority of average monthly expenditures.

Rural-Urban Spending Gap Narrows

The survey highlights that the gap in spending between rural and urban areas has reduced significantly. In 2023-24, the rural-urban consumption gap decreased to 69.7%, down from 71.2% in 2022-23 and a much higher 83.9% in 2011-12.

This narrowing gap reflects the growing economic progress in rural areas, where the average monthly per capita consumption expenditure (MPCE) increased by 9.2% to ₹4,122, up from ₹3,773 in the previous year.

Urban areas saw a slightly lower increase in expenditure, with the MPCE rising by 8.3% to ₹6,996.

Non-Food Items Drive Expenditure

Non-food items remained the largest contributor to monthly expenditures across both rural and urban areas. While the share of non-food items slightly decreased in 2023-24 compared to the previous year, they still accounted for the majority of expenses.

In rural areas, the share of food items in MPCE rose marginally to 47% in 2023-24, compared to 46.4% in 2022-23. This was a significant improvement from 52.9% in 2011-12. Similarly, urban areas saw a slight increase in food expenditure, rising to 39.7% from 39.2% in the previous year, but still lower than 42.6% in 2011-12.

In contrast, the share of non-food items in rural MPCE declined slightly to 53% from 53.6% in 2022-23, but it was still higher than 47.1% in 2011-12. In urban areas, the share of non-food items decreased marginally to 60.3%, down from 60.8% in 2022-23, reflecting a slight shift in spending patterns.

Spending Growth Across Social Categories

The survey also revealed that spending growth was more pronounced among Scheduled Tribes, Scheduled Castes, and Other Backward Classes compared to other social categories in both rural and urban areas. This growth reflects improvements in the economic status of these groups.

In urban areas, casual laborers and self-employed individuals saw higher increases in their spending compared to regular wage workers between 2022-23 and 2023-24.

Similarly, in rural areas, casual labor in agriculture experienced a more significant rise in spending than casual labor in non-agriculture sectors. Self-employed individuals in agriculture also saw a greater increase in their expenditures compared to their counterparts in non-agriculture sectors.

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