Rural consumption improved 40% over a decade, says government survey

In an economic shift, rural India's monthly per capita household consumption, adjusted for inflation, soared by over 40% in 2022-23 compared to levels seen in 2011-12, according to a survey released by the statistics ministry late Friday.

The Household Consumption Expenditure Survey revealed that monthly per capita consumption expenditure in rural areas, after accounting for inflation, jumped to ₹2,008 in 2022-23 from ₹1,430 in 2011-12. 

These annual surveys, spanning July to August, play a critical role in shaping government policy interventions, with work on the 2023-24 survey currently underway.

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Urban areas also saw significant gains, with per capita household consumption expenditure rising to ₹3,510 in 2022-23 from ₹2,360 in 2011-12, reflecting a 33% improvement when adjusted for inflation. Without adjusting for inflation, the figures stood at ₹6,459 for urban households and ₹3,773 for rural households in 2022-23, compared to ₹2,630 and ₹1,430 respectively in 2011-12.

These results exclude the benefits from social transfers under various government schemes. 

The latest survey also noted a reduction in inequality, with the Gini coefficient—a measure of income inequality—dropping from 0.283 to 0.266 in the rural sector and from 0.363 to 0.314 in the urban sector since 2011-12. A lower Gini coefficient indicates more equal income distribution.

When factoring in the effect of social transfers, per capita household consumption expenditure in 2023, adjusted for inflation, was ₹2,054 a month in rural areas and ₹3,543 in urban areas. In nominal terms, these figures were ₹3,860 for rural areas and ₹6,521 a month for urban areas.

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Household consumption expenditure encompasses spending on food, fuel, electricity, medical services, education, and items produced in one's own farm or household enterprise, excluding expenses related to entrepreneurial activities, residential land and building purchases, interest payments, insurance premiums, fines, penalties, and gambling, including lottery tickets.

In 2022-23, food accounted for about 46% of the average rural household's consumption. Within this category, beverages, refreshments, and processed food had the highest share, followed by milk and milk products, and vegetables. For non-food items, conveyance led expenditure, followed by medical services, durable goods, fuel, and light.

Urban households allocated about 39% of their monthly per capita consumption to food, with beverages, refreshments, and processed food leading this expenditure, followed by milk and milk products, fruits, and vegetables.

The detailed findings underscore the evolving consumption patterns in India and provide crucial insights for policymakers aiming to address economic disparities and improve living standards across the country.

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