Consumption gap between rural and urban India fell in 2023-24: Survey

Consumption inequality in rural and urban areas of India declined between August 2023 and July 2024 compared with a year earlier, according to the latest Household Consumption Expenditure Survey (HCES) released on December 27.

The Ministry of Statistics and Programme Implementation (MoSPI) decided to conduct two consecutive surveys on household consumption expenditure during 2022-23 and 2023-24, once the situation normalised after the Covid-19 pandemic, according to an official statement, which added that the first survey was conducted during the period August 2022 to July 2023 and the summary results of the survey in the form of a factsheet were released in February 2024.  Subsequently, the detailed report and the unit-level data of the survey were released in June 2024.

The average MPCE (monthly per capita expenditure) in rural and urban India in 2023-24 (without taking into account the social welfare schemes) has been estimated at Rs 4,122 and Rs 6,996 (at current prices), respectively.

MPCE was Rs 3,773 in rural areas and Rs 6,459 in urban areas (at current prices) in 2022-23, according to the survey which added that the estimates of MPCE of 2023-24 are based on the data collected from 2,61,953 households (1,54,357 in rural areas and 1,07,596 in urban areas) in the central sample covering all states and Union Territories.

The urban-rural gap in MPCE declined to 71% in 2022-23 from 84 per cent in 2011-12. It has further come down to 70 per cent in 2023-24 that confirms sustained momentum of consumption growth in rural areas.

Non-food items remain the major contributor to the household’s average monthly expenditure in 2023-24 with about 53% and 60% share in MPCE in rural and urban areas, reports pointed out. Beverages, refreshments and processed food continue to have the major expenditure share in 2023-24 in the food items basket of the rural and urban households. Conveyance, clothing, bedding & footwear, miscellaneous goods & entertainment and durable goods have a major expenditure share in non-food expenditure of the households in both rural and urban areas.

Considering the imputed values of items received free of cost through various social welfare programmes, these estimates of MPCE become Rs 4,247 and Rs 7,078 respectively, for rural and urban areas (2023-2024), reports analysing the survey said. In nominal prices, the average MPCE (without imputation) in 2023-24 increased by about 9% in rural areas and 8% in urban areas from the level of 2022-23.

MPCE is the highest among states in Sikkim (rural – Rs 9,377 and urban – Rs 13,927) and it is the lowest in Chhattisgarh (rural – Rs 2,739 and urban – Rs 4,927). Among the union territories (UTs), MPCE is the highest in Chandigarh (rural – Rs 8,857 and urban – Rs 13,425), whereas it is the lowest in Dadra and Nagar Haveli and Daman and Diu (Rs 4,311) and Jammu and Kashmir (Rs 6,327) in rural and urban areas, respectively, analyses quoting the survey said.

The rural-urban difference in average MPCE among states is the highest in Meghalaya (104%) followed by Jharkhand (83%) and Chhattisgarh (80%). The average MPCE in 9 out of 18 major states is higher than the average MPCE in rural and urban areas in all of India. Across all states and UTs, households spent more on non-food items with the share of non-food items in average MPCE being 53% and 60% in rural and urban areas, respectively, the survey showed. MPCE compiled from HCES is the primary indicator used for most analytical purposes.

The major contributors to the non-food expenditures of the households in 2023-24 have been conveyance, clothing, bedding and footwear, miscellaneous goods, entertainment, and durable goods. HCES is designed to collect information on household consumption and expenditures on goods and services. Data collected in HCES is also used to measure poverty, inequality, and social exclusion.

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