Despite a sharp slowdown in the economy which led to an increase in unemployment, India's consumption story revealed a new picture. According to the latest data of National Sample Survey Organization (NSSO) carried out during July 2011 and June 2012 and covered 7,469 villages in rural areas and 5,268 urban blocks, the average rural monthly per capital expenditure went up by 35.7% in the two year period between 2009-10 and 2011-12. Of the total expenditure, rural households spent less than half on food items, suggesting rise in wages.
The average monthly per capita expenditure during 2011-12 stood at around 1,430 for rural India, a 35.7% increase compared to the 2009-10 survey and 2,630 for urban India, a 32% jump. The average urban monthly per capita expenditure was 84% higher than rural areas.
The share of expenditure on food declined substantially from 53.6% to 48.6% in rural areas and from 40.7% to 38.5% in the urban areas. The faster rise in share of non-food expenditure in rural areas suggests a rise in wages. The rural wages went up from 231.59 a day in 2009-10 to 299 a day in 2011-12, a 29% increase.
Expenditure across the country rose by a third between 2011-12 and 2009-10 but the growth in rural spending outpaced that in urban areas. The consumption basket of households across the country also saw a sharp change during the period.
The survey has revealed that nearly 10 per cent of rural and urban households live below the poverty lines. The poorest 5 per cent in rural areas subsist on a mere Rs 521.44 per month, while in urban areas, the monthly spending by the poorest 5 per cent is on an average Rs 700.50. This in effect means that the poorest of poor subsist on just Rs 17.38 per day in villages and a mere Rs 23.35 a day in cities.
The higher growth in average rural monthly expenditure can be attributed to government schemes like MNREGA and higher minimum support price of crops that have helped increase rural incomes. This in turn has translated to an increased pace of consumption in rural areas.
The average monthly per capita expenditure during 2011-12 stood at around 1,430 for rural India, a 35.7% increase compared to the 2009-10 survey and 2,630 for urban India, a 32% jump. The average urban monthly per capita expenditure was 84% higher than rural areas.
The share of expenditure on food declined substantially from 53.6% to 48.6% in rural areas and from 40.7% to 38.5% in the urban areas. The faster rise in share of non-food expenditure in rural areas suggests a rise in wages. The rural wages went up from 231.59 a day in 2009-10 to 299 a day in 2011-12, a 29% increase.
Expenditure across the country rose by a third between 2011-12 and 2009-10 but the growth in rural spending outpaced that in urban areas. The consumption basket of households across the country also saw a sharp change during the period.
The survey has revealed that nearly 10 per cent of rural and urban households live below the poverty lines. The poorest 5 per cent in rural areas subsist on a mere Rs 521.44 per month, while in urban areas, the monthly spending by the poorest 5 per cent is on an average Rs 700.50. This in effect means that the poorest of poor subsist on just Rs 17.38 per day in villages and a mere Rs 23.35 a day in cities.
The higher growth in average rural monthly expenditure can be attributed to government schemes like MNREGA and higher minimum support price of crops that have helped increase rural incomes. This in turn has translated to an increased pace of consumption in rural areas.
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