The gap between household consumption expenditure in urban and rural areas among the big states is the lowest in Kerala, followed by Punjab, going by the findings of the Household Consumption Expenditure Survey (HCES) for 2022-23.
The difference between urban and rural households’ average monthly per capita consumption expenditure (MPCE) is markedly low in the southern state at just 19.5%, the only big state in India with a sub-20% gap. Punjab recorded a difference of 23.1%, followed by Rajasthan, where the gap is recorded at 38.7%.
The average MPCE of rural households in Kerala, in nominal terms, is Rs 5,984, the highest among the 20 big states and for the urban, it’s Rs 7,078, the sixth from the top.
But inflation could be a factor too, as rural inflation in the 11 years till August 2023, was 91.2% in the state – the fourth highest rate in the country. The rate of urban inflation in the state was 88.5% during the period.
On the other hand, the five states with the highest urban-rural MPCE difference are Chhattisgarh, Jharkhand, Assam, Odisha and Karnataka.
Chhattisgarh’s urban-rural average MPCE divide stands at 81.5%. In absolute terms, the average MPCE of rural households’ in the state is Rs 2,466 –the lowest among the 20 big states and against all-India average of Rs 3,773.
Jharkhand and Assam have recorded an urban-rural MPCE difference of 78.5% and 78.8%, respectively. Odisha and Karnataka have recorded a difference of 75.8% and 74.3%, respectively.
Though the HCES doesn’t give weighted average rural+urban consumption levels for the states, the data indicates that southern states generally doing well on this front too. Hilly states and relatively smaller states (Uttarakhand and Himachal) and urbalised ones — Haryana and Maharashtra — also fare well.
Economists, however, say the difference between urban and rural households MPCE doesn’t necessarily depict the income or poverty conditions of households.
Lekha Chakraborty, professor, NIPFP said: “We need to wait for the unit record data release of this round to understand the dynamics better. A sense of inequality cannot be observed from just these aggregate state-wise figures.”
One such example is Bihar where the difference between urban and rural households MPCE is 40.9% which is the fifth-lowest among the five states, but this doesn’t mean income levels of rural and urban households are high. In fact Bihar has the second-lowest urban MPCE among its households.
Former Chief Statistician of India Pronab Sen said: “The gap really reflects the distribution of income in the two categories. If there is a situation where the income distribution in urban areas has worsened relative to rural areas, then consumption in urban areas will grow more slowly.”
