NSSO, Stories
 

Data: While Rural-Urban MPCE Price Differential Falls Below 80% for All Major States, Inter-State Variations Persist

0

The 2022-23 and 2023-24 Household Consumption Expenditure Surveys reported rural-urban price differentials below 80% for all major states, a decline compared to earlier surveys where some states exceeded 100%. However, notable inter-state variations exist in MPCE compared to the All-India average.

In the first part of this series on the Household Consumption Expenditure Survey, we explored broad trends in consumption across India, analysing expenditure patterns on food and non-food items in rural and urban areas. The analysis highlighted notable shifts, such as the increasing expenditure on ‘Beverages and Processed Foods’ in the food category and ‘Durable Goods’ in the non-food category, alongside a decline in spending on cereals. The data also revealed a narrowing gap between rural and urban spending as a percentage of rural Monthly Per Capita Expenditure (MPCE).

In this concluding part, we delve deeper, examining these consumption patterns across states and social groups, and uncovering regional and demographic trends wherever the data is available.

Kerala leads in Rural MPCE, Haryana tops Urban MPCE until Telangana takes over

State-level data on Monthly Per Capita Expenditure (MPCE) reveals a significantly higher level of consumption in urban areas compared to rural areas, along with notable inter-state variations. For this analysis, only major states have been considered. In 1999-2000, Kerala led rural MPCE with an average of ₹766, while Haryana topped urban MPCE with ₹912. Fast forward to 2022-23, Kerala maintained its lead in rural MPCE at ₹5,924, while Telangana surpassed Haryana to claim the highest urban MPCE at ₹8,158, slightly ahead of Haryana’s ₹7,911. This trend persisted into 2023-24, with Kerala securing the top spot in rural MPCE at ₹6,611, and Telangana extending its lead in urban MPCE to ₹8,978.

Over the last six surveys, an average of eight states reported rural MPCE higher than the All-India rural MPCE, while seven states recorded urban MPCE exceeding the national urban average. Kerala, Maharashtra, Punjab, and Haryana consistently stood out, with both rural and urban MPCE levels surpassing the all-India averages. They were followed by states like Karnataka, Tamil Nadu, and Andhra Pradesh, which also demonstrated above-average figures in most cases. In contrast, states such as Assam, Bihar, Uttar Pradesh, and West Bengal consistently reported rural and urban MPCE levels below the national averages, with only a few exceptions over the years.

Understanding Rural-Urban Disparities in Monthly Per Capita Expenditure

Comparing rural and urban MPCE across states reveals inherent challenges, largely due to price level differences between the two areas. Urban areas consistently have higher price levels than rural areas, with a typical price differential of 15-20%. Consequently, the perceived consumption gap may exaggerate the actual difference in living standards, which could be narrower when adjusted for price variations. Furthermore, such adjustments are crucial for comparing data across successive survey rounds, as MPCE figures are generally calculated at current prices.

Grouping major states by the extent of their rural-urban MPCE differential highlights significant trends. Except for Kerala and Punjab, all major states showed a rural-urban MPCE differential exceeding 30% of rural MPCE in 2023-24, while the national average differential stood at 70%. A price differential below 30% could more or less mean that the consumption levels are more or less similar across rural and urban areas. Notably, the 2022-23 and 2023-24 surveys reported rural-urban price differentials below 80% for all major states, a decline compared to earlier surveys where some states exceeded 100%.

Most SCs and STs at lower levels of MPCE, while the rest dominate the higher levels

An analysis of socio-economic groups highlights significant disparities in MPCE across India. Scheduled Castes (SC) and Scheduled Tribes (ST) consistently report much lower MPCE levels compared to the general population, as reflected by their higher concentration in lower MPCE ranges. This pattern holds true across both rural and urban areas. The Other Backward Classes (OBC) fare moderately better than SCs and STs but lag behind the ‘Others’ social group, emphasizing enduring economic inequalities among social categories. These trends are consistent both at the all-India and state levels. It has to be noted that such detailed data is not available for 2022-23 and 2023-24.

The per-thousand distribution of population within a socio-economic group across different MPCE classes offers valuable insights into intra-group inequality. This approach helps identify disparities within a single group by examining the concentration of individuals in various MPCE ranges. Detailed data on the per 1,000 population distribution across social groups for different MPCE fractile classes from 1999-2000, 2004-05, and 2011-12 offers further insights. In rural areas, on average, 59% of the ST population is concentrated in the bottom five fractile classes, compared to 50% for SCs, 40% for OBCs, and 27% for the ‘others’ group.

In urban areas, the trend between Scheduled Castes (SC) and Scheduled Tribes (ST) reverses, with about 50% of STs concentrated in the bottom five fractile classes, compared to 56% for SCs, 48% for Other Backward Classes (OBCs), and 28% for the ‘others’ group. This pattern aligns with a broader observation: social groups with lower average MPCE tend to have a smaller proportion of their population in higher MPCE classes, reflecting persistent economic disparities across groups.

A time-series analysis within social groups shows gradual shifts in MPCE Distribution. A comparison of data from the 1999-2000, 2004-05, and 2011-12 surveys reveals slight improvements in the economic positioning of social groups, particularly in rural areas. Among Scheduled Tribes (ST), the proportion of individuals in the bottom five fractile classes declined from 60% to 58% between 1999-00 to 2011-12. This share dropped more significantly for Scheduled Castes (SC), from 52% to 48%. Similarly, the share for Other Backward Classes (OBC) decreased from 41% to 38%, while the ‘others’ group saw a marginal rise from 26% to 28%.

In urban areas, trends were less consistent. The share of STs in the bottom five fractile classes declined from 53% to 46% in 2004-05 but rose to 53% by 2011-12. For SCs, the proportion dropped steadily from 59% to 53%. OBCs experienced a marginal decline from 48% to 47%, while the ‘others’ group saw a slight reduction from 29% to 27%.

These shifts indicate a slow yet discernible improvement in the economic standing of marginalized groups, though disparities remain significant.

‘Agricultural labour’ in rural areas, and ‘Casual labour’ in urban areas have the lowest MPCEs among other occupations

An analysis of household types based on their primary occupation reveals significant disparities in average MPCE across different household types and across regions for surveys of 1999-00, 2004-05 and 2011-12.

In rural India, households classified as ‘agricultural labour’ have the lowest average MPCE among all household types, closely followed by those classified as ‘other labour.’ This highlights the economic vulnerability of the rural labour class. Households ‘self-employed in agriculture’ have a lower average MPCE compared to those ‘self-employed in non-agriculture.’ The highest average MPCE is observed among households in the ‘others’ category.

Looking at the distribution across MPCE fractile classes, 58% of households classified as ‘agricultural labour’ and 44% of ‘other labour’ are concentrated in the bottom five fractile classes. For ‘self-employed in agriculture,’ this proportion is 34%, while for ‘self-employed in non-agriculture,’ it is 36%.

In urban India, the household type ‘casual labour’ exhibits the lowest average MPCE, followed by ‘self-employed’ households. Households classified as ‘regular wage/salary earning’ have a higher average MPCE than ‘self-employed’ households but fall short of the ‘others’ category, which has the highest average MPCE.

The MPCE distribution among fractile classes shows that a whopping 74% of ‘casual labour’ households are in the bottom five fractile classes, compared to 44% for ‘self-employed’ households. For ‘regular wage/salary earning’ households, this figure is 26%, while it is only 27% for the ‘other labour’ category.

The economic positioning of different household types reveals that in rural areas, ‘other labour’ households align more closely with the national average MPCE, while in urban areas, this alignment is seen among ‘self-employed’ households. The poor economic standing of ‘agricultural labour’ households in rural areas and ‘casual labour’ households in urban areas is particularly evident.

Share.

Comments are closed.

scroll