The Ministry of Statistics & Programme Implementation (MoSPI) has released the Household Consumption Expenditure Survey for 2023-24, shedding light on the evolving spending patterns of rural and urban households. The survey indicates that the urban-rural consumption gap continues to narrow, driven by increased monthly per capita consumption expenditure (MPCE) across both segments. Rural MPCE rose to ₹4,122, while urban MPCE stood at ₹6,996, highlighting economic progress and shifting consumption dynamics in the country.
Key Findings: Consumption Patterns Across Rural and Urban Areas
The survey reveals a rise in MPCE for both rural and urban populations compared to the previous year.
- Rural MPCE Growth: Average MPCE in rural areas increased by 9% to ₹4,122 at current prices. When accounting for the imputed value of free government-provided items, rural MPCE climbed slightly to ₹4,247.
- Urban MPCE Growth: Urban MPCE saw an 8% rise, reaching ₹6,996. With the addition of government benefits, the figure rose to ₹7,078.
- Urban-Rural Gap: The urban-rural consumption gap narrowed from 71% in 2022-23 to 70% in 2023-24, signaling continued progress in bridging the economic divide.
Significant Gains Among Lower-Income Groups
The bottom 5% of the population experienced the most substantial growth in MPCE, reflecting a positive shift for India’s economically weaker sections.
- Rural Households: The bottom 5% of rural households reported an average MPCE of ₹1,677, marking a 22% increase compared to the previous year.
- Urban Households: Urban counterparts in the same segment recorded an average MPCE of ₹2,376, a 19% increase from the previous year.
This robust growth among lower-income groups highlights the impact of social welfare schemes and rising incomes in these segments.
Contrasting Trends Among High-Income Groups
While the lower-income brackets reported significant gains, the top 5% of both rural and urban populations experienced a decline in spending.
- Rural High-Income Households: Average MPCE for the top 5% fell to ₹10,137, reflecting a decline of 3.59%.
- Urban High-Income Households: The top 5% in urban areas saw their MPCE drop to ₹20,310, a decrease of 2.53%.
This trend suggests a shift in consumption priorities or external factors impacting spending among higher-income households.
Consumption Categories and Regional Variations
The survey highlights diverse spending patterns across food and non-food categories and reveals significant regional differences in consumption.
- Non-Food Dominance: Non-food items constituted the largest share of household expenditure, accounting for 52.96% of rural spending. Key non-food categories included conveyance, clothing, footwear, and entertainment.
- Food Categories: Among food-related expenses, beverages, refreshments, and processed foods emerged as significant contributors.
- Regional Insights:
- Highest MPCE: Sikkim recorded the highest average MPCE among states.
- Lowest MPCE: Chhattisgarh had the lowest MPCE among states, while union territories like Chandigarh led in MPCE, and regions like Jammu & Kashmir, Dadra & Nagar Haveli, and Daman & Diu reported the lowest figures.
What Does This Indicate for India’s Economic Future?
The narrowing urban-rural consumption gap is an encouraging sign of India’s economic development. Rising MPCE in rural areas, particularly among lower-income groups, indicates improved access to resources and economic opportunities. Social welfare initiatives and government interventions appear to be driving this positive trend.
However, the decline in spending among high-income groups raises questions about consumption patterns and external economic pressures. The data underscores the need for targeted policies that sustain growth across all income brackets and regions.
As India progresses, continued focus on rural development, inclusive growth, and balanced consumption will be crucial in driving sustainable economic growth. The 2023-24 Household Consumption Expenditure Survey offers a snapshot of India’s evolving consumption landscape.
 With narrowing disparities and rising spending among lower-income groups, the findings reflect progress in reducing economic inequalities. However, challenges remain in ensuring equitable growth across income brackets and regions. The insights from this survey will serve as a critical tool for policymakers in shaping India’s future economic strategies.