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Household spend: Urban-rural gap narrows

June 21, 2013 09:33 IST

Household spend: Urban-rural gap narrows

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BS Reporter in New Delhi

 

The urban-rural divide declined in terms of household consumption expenditure in a two-year period ended June 30, 2012, even as villagers still spent 84 per cent less than their town counterparts, official data showed on Friday.

The average monthly per capita expenditure in rural areas was Rs 1,430; it was 84 per cent higher in urban areas, at Rs 2,630, in 2011-12 (July to June), according to the 68th round of the National Sample Survey.

In 2009-10, urban expenditure was Rs 1,984.5 a month, 88 per cent higher than the rural consumption figure of Rs 1,053.6.

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Photographs: Reuters
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Inequality between the top and bottom 10 per cent of the population rose slightly in rural areas but remained flat in urban areas in terms of consumption over the period, the data showed.

The bottom 10 per cent of households spent 16.9 per cent of what the top 10 per cent did on consumption in 2011-12 in rural areas, against nearly 18 per cent in 2009-10.

On the other hand, the poorest 10 per cent in terms of consumption in urban areas roughly spent 10.3 per cent of what the richest 10 per cent incurred in 2011-12 as compared to 10.2 per cent in 2009-10.

There is no measurement in India on income inequality and the consumption pattern is taken as a proxy for this parameter.

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Image: A shopkeeper does calculations standing in his nut and spice shop in Mumbai.
Photographs: Arko Datta/Files/Reuters
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Household consumption expenditure data normally comes after a gap of five years. However, the latest report was issued after two years since 2009-10 was considered an aberration; it was a year after the global financial crisis and a major portion of 2009 saw a drought.

The Planning Commission is likely to issue its revised poverty line on the basis of these numbers, once the panel chaired by C Rangarajan, the Prime Minister's Economic Advisory Council chairman, gives its report on revising the earlier Suresh Tendulkar committee parameters.

Last year, the Commission had stirred a controversy when it pegged the poverty line at Rs 28.65 per capita daily consumption in cities and Rs 22.42 in rural areas for 2009-10.

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Photographs: Reuters

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Consumption expenditure on food articles as a proportion of total monthly expenditure of rural households decreased by 6.4 percentage points during the 2009-2012 period, a far sharper drop than during the current coalition’s first tenure in 2004-09.

A decrease in the proportion of total expenditure on food is considered a sign of more prosperity.

Food consumption was 48.6 per cent of total expenditure in rural areas in 2011-12, compared to 55 per cent in 2009-10.  

The expenditure had declined by only 1.4 percentage points, from 55 per cent in 2004-05 to 53.6 per cent in 2009-10, roughly coinciding with the UPA regime’s first stint.

In urban areas, the fall in proportion of food consumption expenditure to that of total consumption fell slower, from 40.7 per cent to 38.5 per cent from 2009-10 to 2011-12.

During 2004-05 to 2009-10, this had declined from 42.5 per cent to 40.7 per cent.


Photographs: Arko Datta/Reuters
Tags: UPA

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