1a.The latest NSSO survey, released in October 2008, for 2006-07 on patterns of consumption expenditure show further increase in disparities between rural and urban population pointing toward failure of the objective of inclusive growth envisaged in the XI Five Year Plan. The reform years have been marked by a growing rural-urban divide.
Surveys on household expenditure reveal that the monthly per capita consumption expenditure (MPCE) in rural India has grown at a very low rate, while growing at a far higher rate in urban India. While MPCE (Monthly Per capita Expenditure) of the rural individual increased by only 95 per cent in real terms between June 1988 and June 2007 (compound annual growth rate of just 1.29 per cent) the urban individual increased by 164 per cent (CAGR of 3 per cent).
In nominal terms, average rural MPCE increased from Rs 158 in June 1988 to Rs 695 in June 2007. Average urban MPCE increased from Rs 250 in 1988 to Rs 1313 in 2007 in nominal terms. The average urban MPCE at all India level was 1.89 times more than the average rural MPCE. The disparity was the widest in Orissa, with the average urban MPCE 2.34 times the average rural MPCE, followed by West Bengal (2.18), Maharashtra (2.16) and Jharkhand (2.02). It was the least in Haryana at 1.32 followed by Kerala (1.34) and Punjab (1.34). While nominal rural MPCE was 63 per cent of urban MPCE in 1988, this proportion was down to 53 per cent in 2007. Since the consumer price index for this period increased by about 7 per cent per annum in both rural and urban India, it is clear that the growth of rural incomes fell behind that of urban incomes
1b. State-wise data also shows that regional disparities are not narrowed and continue to be at same pattern as evidenced in previous years. Among the major States, the lowest average MPCE for rural areas was that of Orissa (Rs.459), preceded by Madhya Pradesh (Rs.515), and Chhattisgarh, Bihar and Jharkhand (all under Rs.560). The highest average rural MPCEs were those of Kerala (Rs. 1250) and Punjab (Rs.1198). The lowest average urban MPCE was that of Bihar (Rs.865), proceeded by Uttar Pradesh and Madhya Pradesh (about Rs.1000 each). The highest urban average MPCEs were those of Kerala (Rs.1681), Maharashtra (Rs.1673) and Punjab (Rs.1609).
Avg. MPCE –All India |
Rural (Rs) |
Urban (Rs) % over rural |
2004-05 |
579 |
1105 |
2005-06 |
625 |
1171 |
2996-07 |
695 |
1312 (190%) |
1c.Percentages of rural and urban population below specific MPCE levels in three successive years, all-India (current prices)
MPCE level |
% below the level 06-07 |
RURAL
05-06 |
04-05 |
|
% below the level
06-07 |
URBAN
05-06 |
04-05 |
235 |
1.2 |
2.0 |
2.8 |
335 |
1.5 |
3.0 |
3.5 |
365 |
12.7 |
18.7 |
23.9 |
580 |
17.4 |
21.8 |
25.8 |
580 |
50.3 |
58.9 |
65.3 |
1100 |
57.2 |
62.7 |
65.9 |
690 |
64.9 |
72.3 |
77.5 |
1380 |
70.3 |
75.7 |
77.4 |
890 |
80.3 |
86.1 |
88.8 |
1880 |
82.9 |
86.5 |
87.8 |
1155 |
90.6 |
93.2 |
94.7 |
2540 |
91.4 |
93.5 |
93.9 |
In 2006-07, roughly one-half (50.3%) of the rural population of India had MPCE less than Rs.580 compared to only 17.4% of the urban population. For urban India, the median level of MPCE was Rs.990.
1d.Survey indicates that the per capita spending on food rose in the rural areas to Rs 363 a month in 2006-07, from Rs 333 a year earlier, and constituted as much as 52 per cent of the total per capita expenditure. In urban areas per capita spending on food was Rs 517constituting 39% of the total consumption expenditure.
|
Rural (Rs) |
Urban (Rs) |
% of rural |
% of urban |
Food |
363 |
517 |
52 |
39 |
Non-food |
332 |
795 |
48 |
61 |
The average rural Indian spent in 2006-07 on household consumption, 52 paise was spent on food, of which 17 paise was spent on cereals, 8 paise on milk and milk products, 6 paise on vegetables, 4 paise on sugar, salt and spices, and 4 paise on beverages, refreshments, processed food and purchased cooked meals. The average rural Indian also spent 10 paise (out of every rupee spent on consumption) on fuel for cooking and lighting, 7 paise on clothing and footwear, 3 paise on education, 8 paise on medical expenses, 6 paise on miscellaneous non-durable goods, 8 paise on consumer services, and 4 paise on consumer durables.The average urban Indian differed noticeably from the rural mainly by spending only 9 paise out of one rupee on cereals, but as much as 14 paise on consumer services, 7 paise of education and 5 paise on rent. In fact the urban Indian devoted only 39 paise of the rupee on food, spending a smaller portion of the rupee than the rural Indian on every food group the category “beverages, refreshments and processed food”
Widening rural-urban trend persists in the consumption of fuel and power, and the status of housing and employment. Notably, wood, chips and cow-dung cakes continue to be the main source of fuel for an overwhelmingly proportion (84 per cent) of the rural population. In contrast, a high 60 per cent of urbanites were found to be using cooking gas. There is a sharp contrast with the rural areas, in which 42 per cent of rural homes still use kerosene lamps for lighting, for want of electric connections.
1e.Land Ownership pattern:
About 65% of rural households in India possessed land of size 0.01 hectares or more. Of these, more than a quarter (17.7% of rural households) possessed only 0.41-1.00 hectares of land.
Percentage of RURAL households by size class of land possessed: all-India, 2006-07
Land size |
% of hhs |
Avg MPCE (Rs) |
<0-01 |
35.0 |
650 |
0.01 to 1.00 |
45.6 |
674 |
1.01 to 2.00 |
10.9 |
721 |
2.01 to 4.0 |
6.0 |
847 |
4.01 to 8.0 |
1.7 |
1021 |
8.01 and above |
0.7 |
1233 |
Total |
100 |
695 |
Source: NSSO |
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The survey data for the past twenty years bears testimony to the widening economic gap between rural Bharat and Urban India. In the XI plan period, the economic disparities will further widen due to planned differences in the rates of growth of three major sectors. While GDP growth of Agri sector is planned at only 4%, Industrial and Service sectors GDP growth is planned at 10% or more thus consciously widening the gap between rustic rural populace and the urban elite class. And the plan document declares with a strait face that the XI plan aims at INCLUSIVE GROWTH!!!
WITHER INCLUSIVE GROWTH???
