Tuesday, February 12, 2008

Indian Household Expenditure Rising (NSSO Finding)

by Phillip Horton

Overview

The growing Indian economy is now showing its profits in the households across India, a new finding by the NSSO survey confirms. The purchasing power of the Indian middle class has also risen. However, the results for the rural and the urban sector vary. Nonetheless, the findings confirm the growing power of the Indian households. Some states topped in the list while other less developed ones lagged behind in this regard. There were some glaring disparities in the urban sector as well which highlight the uneven distribution of the results of the growing Indian economy. The NSSO survey was the 62nd such survey for the year 2005-06 and some of the key findings highlight the way the Indian economy will progress in the future.

The Findings

The improvements in the monthly per capita consumption expenditure was Indian rupees 625 for the rural area and rupees 1,171 for the urban areas. In the earlier, such survey the figures had stood at rupees 565 monthly expenditure for rural area and rupees 1060 for the urban Indian sector. This shows the notorious rural urban divide of the Indian economy. The difference between the urban and the rural expenditure thus still stands at about 88%. In the rural part of India, the individual has to spend a little below 21 rupees for fulfilling their daily needs while the same for the urban Indian individual stands at 39 rupees. The percentage of the Indian rural population that stood below the MPCE or monthly per capita consumption expenditure is about 19% because the population spent below 12 rupees for a day. The report has showed definite improvements in the income but the expenditure on food when considered in relation to a percentage of total expenditure recorded a consistent decrease not only in the urban area, but also in the rural area. Earlier, the expenditure on food by the urban and the rural population had stood at 54% and 42% correspondingly. However, the current findings for the same stood at urban 53% and rural 40%.

The data collected points that the rural individual’s expenditure is more on food items such as milk and milk products, as well as cereals and vegetables. The percentage of this expenditure of the rural is at 31% while the same expenditure by the urban citizen is at only 20%. The spending habits of the urban Indian population were different than the habits of the rural population. The urban population spends more on items like beverages, processed food items and beverages. The report also found that there are considerable consumption expenditure differences. The state of Bihar in this regard has the lowest score which stands at rupees 684 per individual. In the rural areas the figures for the same are recorded in Chhattishgarh which is rupees 429 per individual.

The state that recorded the highest in relation to expenditure is Kerala and the figures for its urban population stands at rupees 1566 each month the second state in this regard is Punjab with the figure of rupees 1520.

 

 

 

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