High economic growth in the five years to 2009-10 has pushed up monthly per capita household consumption in the country by two-thirds of the previous five years, as per government data released on Friday.
Between 2004-05 and 2009-10, when the economy grew an average of 8.7% a year, rural Indian households increased their spending by about 63%, only a tad lower than 68%, the rate at which urban households? expenditure rose, the latest five-yearly data released by the National Sample Survey Organization (NSSO) showed.
The rise in rural and urban household expenditure was 16% and 29%, respectively, in the previous years when average GDP growth was 6%. The fact that average household spending by rural Indians shot up much faster than their urban counterparts over the previous decade indicates that the economic growth was not only steeper but also more inclusive in the five years up to 2009-10.
The consumer expenditure data is the latest statistics generated by NSSO as part of its 66th round survey conducted during July 2009-June 2010. The previous survey was done during July 2004-June 2005.
As FE had reported earlier, the survey also brought out data showing that although about half of Indian workers are now working as waged employees, the rate of unemployment among them has dipped.
The NSSO data, however, show that the progressive decline in share of food expenditure in the overall household expenditure over the last two decades ? seen as a sign of prosperity ? saw some moderation between 2004 and 2010.
Analysts attribute this to high food inflation in recent years. The sharpest decline in share of food in the rural consumption expenditure basket was in the five years to 2004-05 (over 5 percentage points in case of urban India and 4.5 percentage points for urban India). In comparison, the decline in the latest five years surveyed was less than 2 percentage points for both categories.
The data, which aim to identify changes in consumer expenditure patterns spread over five years, reveal that the monthly per capita rural household expenditure was R953 between 2004-05 and 2009-10 while the corresponding figures for urban India was R1,856.
The NSSO data highlight the gap between urban and rural India with urban monthly per capita expenditure raced ahead of the rural counterpart by a staggering 88%. The consumption inequality within rural India was far less when compared with its richer urban counterpart. The richest 10% of rural India consumed 5.6 times more than the poorest 10% in the region. On the other hand, the richest 10% of the urban India consumed 9.8 times the poorest 10% of urban population.
NSSO has been collecting extensive five-yearly consumption data since 1987.
In the latest survey, the sample comprised 7,524 villages in rural areas and 5,284 urban blocks spread across the length and the breadth of the country.
The data further declassify the consumption expenditure in the urban and the rural populace between food and non-food items and various other sub-groups under the two heads.
Food continued to account for more than half of rural household spending and over 40% of the urban household spending. Another marked feature of the data was that there was big jump in share of durable goods in urban household expenditure from 4.1% in the previous five years to 6.7% in the five eyars up to 2009-10.
State-wise data showed that Kerala with the highest household monthly per capita expenditure of R1,835 followed by Punjab at R1,649 and Haryana at R1,510. The national average expenditure stood at R1,054.
Bihar, at the other end of the spectrum, had the least monthly per capita expenditure of R780 followed by Chhattisgarh at R784 and Orissa at R818.