The National Sample Survey Office (NSSO) released the results of the latest Household Consumption Expenditure Survey a few days ago. The report highlights some interesting trends in household consumption patterns over the last two decades. The changes in the rural consumption patterns are particularly noteworthy.
Some of the key highlights of the survey could
be listed as follows:
Consumption levels
·
The average monthly per capita
consumption expenditure (MPCE) in rural areas is Rs3773 while in urban areas it
is about 71% higher at Rs6459.
·
Rural population spends 46% on
food and 54% on non-food items. While in urban India this ratio is 39% and 61%.
Consumption disparities
·
There is a significant
regional skew in both rural and urban expenditure levels. Sikkim has the largest MPCE (Rs7731 for rural and Rs12105 for
urban consumers) while Chhattisgarh has the lowest MPCE (Rs2466 for rural and
Rs4483 for urban consumers). Delhi, Goa, Kerala, Punjab, Tamil Nadu are some
notable states with above average MPCE. Assam,
Bihar, Gujarat, Jharkhand, Odisha, Uttar Pradesh, West Bengal are some notable
states with below average MPCE.
·
SC/ST have below average
MPCE, while OBC’s consumption levels are close to national
average.
·
Rural-Consumption gap has
reduced over the past two decades, but it is still
quite high. In FY05 Rural MPCE (Rs579) was 91% lower than the urban MPCE
(Rs1105). In 2022-2023, the gap has reduced to 71% (Rs3773 vs Rs6459)
·
Overall, the top 5% of rural
population (MPCE Rs10501) is consuming 7.6x more than the bottom 5% (MPCE
Rs1373). The skew is much higher in urban India where the top 5%
population (MPCE Rs20824) spends 10.4x more than the bottom 5% (MPCE Rs 2001). MPCE
of the top 5% in urban areas (Rs20824) is almost 2x as compared to the MPCE of
top 5% in rural area (MPCE Rs10501).
·
Not only between the top 5% and
bottom 5%; the gap is significant between the top 5% and the next 5%. In urban
area, this gap is 68% (Rs20824 vs Rs12399) while in rural areas this gap is 58%
(Rs10501 vs Rs6638)
Consumption patterns
·
Beverages, Refreshments, and
Processed Food is the largest item in urban and
rural consumption baskets. Urban consumers spend 10.64% of MPCE on this while
rural consumers spend 9.64% of MPCE on this. Dairy products are the second
largest consumption item in both rural (8.33%) and urban (7.22%) baskets.
Conveyance and medical expenses come at a close third and fourth.
·
Since FY05, rural India has
seen a significant rise in expenditure on Fruits, beverages & processed
foods, hospital expenses, conveyance, entertainment, and durable goods. The
share of cereals, sugar & salts, fuel & light, clothing and footwear
have seen a significant fall. Education and toiletries are two notable items
that have not seen much change in share in MPCE.
· In the case of the urban consumption basket, the trends are
similar, except that spend on education has fallen and expenditure on rent has
seen notable increase.
