“Share of essential items like food, clothing, electricity, fuel and footwear in average annual per capita consumption expenditure has come down, while the share of durables goods has increased “
The Indian economy has ushered in a new era, wherein the country's per capita income growth in recent year" has out-performed that of other major "Asian economies. However, the gains of prosperity have been distributed unevenly. The paradox of plenty amid poverty ceases to lift. For instance, per capita income in the richest state of the country is, about five times that of the poorest. India's economic diversity matches its social diversity and this engenders a wide spectrum of consumers in terms of their income levels and spending behaviour.
What is noteworthy here is that the diversity is not only visible in the spending behaviour of people with different levels of income, but also with the same level of income. This is because income levels by themselves do not reveal much about market behaviour and purchasing power. There are other factors, such as location, cultural conditioning, and to some extent, level of education and occupation, that determine the spending behaviour of individuals.
Household consumption expenditure over time has been moving in the direction dictated by forces of economic growth and expansion. The National Sample Survey (NSS) data reveals that the level of consumption in the urban sector is much higher than that in the rural sector. In the rural sector, about 22 % of the population as a whole had monthly per capita expenditure (MPCE)' below Rs 300, while in the urban sector, less than 5% of the population had an MPCE below Rs 300. On the whole, the average MPCE was 87% higher in the urban areas com¬pared to the rural areas.
While states like J&K, Himachal Pradesh, Punjab and Kerala ranked higher than others in terms of spending in the rural sector, Delhi, Maharashtra and Mizoram topped the list in the urban sector.
There are major differences in consumption expenditure of the top and bottom deciles of the population. If the poor spend Re 1 on food, the rich spend Rs 4. Marked differences can be observed in luxury items like jewellery and appliances (ACs, refrigerator, washing machines). If the poor spend Re 1, the rich spend Rs 188 on large appliances.
The share of essential items like food, clothing, electricity, fuels and footwear in total average annual per capita consumption expenditure has reduced, while the share of durables goods has increased, which reflects the changing preferences of consumers. In this change, one can observe a movement from more to the less essential, or from the essential to the non-essential. While the gap between the rural and the urban market will be bridged only radically, one can rejoice that aggregate expenditure at the country level grew steadily at an annual rate of 4.5% be¬tween 1996-97 'and '02,03.
What is noteworthy here is that the diversity is not only visible in the spending behaviour of people with different levels of income, but also with the same level of income. This is because income levels by themselves do not reveal much about market behaviour and purchasing power. There are other factors, such as location, cultural conditioning, and to some extent, level of education and occupation, that determine the spending behaviour of individuals.
Household consumption expenditure over time has been moving in the direction dictated by forces of economic growth and expansion. The National Sample Survey (NSS) data reveals that the level of consumption in the urban sector is much higher than that in the rural sector. In the rural sector, about 22 % of the population as a whole had monthly per capita expenditure (MPCE)' below Rs 300, while in the urban sector, less than 5% of the population had an MPCE below Rs 300. On the whole, the average MPCE was 87% higher in the urban areas com¬pared to the rural areas.
While states like J&K, Himachal Pradesh, Punjab and Kerala ranked higher than others in terms of spending in the rural sector, Delhi, Maharashtra and Mizoram topped the list in the urban sector.
There are major differences in consumption expenditure of the top and bottom deciles of the population. If the poor spend Re 1 on food, the rich spend Rs 4. Marked differences can be observed in luxury items like jewellery and appliances (ACs, refrigerator, washing machines). If the poor spend Re 1, the rich spend Rs 188 on large appliances.
The share of essential items like food, clothing, electricity, fuels and footwear in total average annual per capita consumption expenditure has reduced, while the share of durables goods has increased, which reflects the changing preferences of consumers. In this change, one can observe a movement from more to the less essential, or from the essential to the non-essential. While the gap between the rural and the urban market will be bridged only radically, one can rejoice that aggregate expenditure at the country level grew steadily at an annual rate of 4.5% be¬tween 1996-97 'and '02,03.
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