New Delhi, December 28, 2024.
REVERSING A DECLINING trend from over a decade, the share of food in monthly expenditure of households in rural as well as urban areas went up in 2023-24, according to the Household Consumption Expenditure Survey (HCES) 2023-24 fact sheet released by the Ministry of Statistics and Programme Implementation (MoSPI) on Friday.
This probably reflects the impact of higher food prices; given that the figures are in nominal terms, the share of food in the consumption basket of rural households went up to 47.04 per cent in 2023-24 from 46.38 per cent in 2022-23, while that for urban households inched higher to 39.68 per cent in 2023-24 from 39.17 per cent in the previous year.
The HCES data also showed that the difference in average monthly consumption expenditure between rural and urban households narrowed further to 69.7 per cent in 2023-24 from 71.2 per cent in 2022-23, and 83.9 per cent 11 years ago in 2011-12, which implies that rural consumption spending continued to rise more than urban consumption spending over the last one year.
“The urban-rural gap in MPCE has declined to 71 per cent in 2022-23 from 84 per cent in 2011-12. It has further come down to 70 per cent in 2023-24 that confirms sustained momentum of consumption growth in rural areas,” the Ministry said in a statement.
Rural average monthly consumption spending per person increased to Rs 4,122 in 2023-24, an increase of 9.3 per cent from Rs 3,773 in 2022-23. It had stood at Rs 1,430 in 2011-12. This increase in rural spending over the one-year period was higher than the urban average monthly consumption expenditure per person at Rs 6,996 which increased from Rs 6,459 in 2022-23. The urban average monthly consumption expenditure per person had stood at Rs 2,630 per person in 2011-12. This seems to suggest that the pace of spending is more in rural India compared with the urban population, which seems to be cutting down on its consumption.
A closer look at the fractile data reveals that the top 5 per cent of the rural and urban population saw a decrease in consumption spending in 2023-24, even as all other segments of the population, including the bottom 5 per cent, registered an increase in spending.
Experts pointed out that this is in contrast to evidence from other datasets that show a rise in spending by top segment, especially on premium goods. “Every fractile class has shown an increase in consumption except the top fractiles which is opposite to the trend being seen in other datasets,” an economist, who did not wish to be named, said.
