The rural-urban divide in India is so prominent that the income of an average person in the rural parts of India is less than even half of the urban counterpart. The government has compiled the estimates of rural and urban per capita income in terms of Net Value Added (NVA), which is Rs 98,435 in urban areas and Rs 40,925 in the rural areas, Rao Inderjit Singh, MoS (Independent Charge), MOSPI, said in a reply to a question in Rajya Sabha. Rural income plays a major role in boosting India’s spending and consumption power as nearly 70 per cent of the total population lives in rural areas.
Even behind the ongoing slowdown, the fall in rural demand is believed to be one of the major reasons. The low income in the rural heartland is despite the higher labour participation rate and employment rate than the urban areas. The unemployment rate in rural areas in FY 18 was 5.3 per cent, whereas it was 7.8 per cent in the urban areas in FY18, according to the data provided by Rao Inderjit Singh in Rajya Sabha.
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Meanwhile, the government says that it has taken many steps to boost per capita income through boosting GDP growth. The minister further referred to Make-in-India programme, cut in corporate tax rate from 30 per cent to 22 per cent, approval of a realty fund worth Rs 25,000 crore for stalled housing projects, extension of PM Kisan scheme to include all farmers, and extending the scheme of reimbursement of taxes and duties for export promotion replacing Merchandise Exports from India Scheme (MEIS), as the measures undertaken to boost the per capita income.