Spending Patterns of Urban and Rural Poor

Source: http://www.indiaspend.com/sectors/rich-poor-gap-widens-in-urban-rural-india-45473

Latest National Sample Survey Organisation (NSSO) survey report has highlighted some interesting facts about the rural-urban divide and spending characteristics of the two groups. Some of these are: 

  • The median monthly per capita expenditure (MPCE) increased 33% in rural areas and 34% in urban areas between 2009-10 and 2011-12.
  • While rural households are spending more on healthcare, urban households are spending more on transportation
  • Food is accounting for lower spends in both rural and urban areas. Spending on non-food products in rural areas increased from 46% in 2010 to 51% in 2011-12 while it increased from 59% to 61% in urban areas.
  • The 2009-10 NSSO report showed that, on an average, rural and urban consumers spent Rs35and Rs 66, respectively, per day. In contrast, rural and urban consumers spent Rs 48 and Rs 88, on an average, according to the 2011-12NSSO survey
  • Indian consumers’ expenditure follows a growing trend. For example, from 2007-08 to 2011-12, spending by rural consumers increased from Rs 772 to Rs 1,430 per month. Over that same period, urban consumer spend rose from Rs 1,472 to Rs 2,630 per month. As we can see, urban consumers’ MPCE multiplies at around twice the rate than their rural counterparts.
  • Out of the miscellaneous goods & services section, rural consumers spend the most out of their income on medical care (6.9%) and the second most on ‘conveyance’ (4.8%), or ‘transportation’. Urban consumers, on the other hand, spend the most on ‘conveyance’ (7.5%), and the second-most on ‘consumer services’ (6.5%), or services that exclude conveyance.
  •  Interestingly, 5.7% of urban India’s miscellaneous expenditure budget is for education while only 3.1% of rural India’s spending is for education.

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