The latest survey of household consumption expenditure statistics has shown that rural consumption has remained robust, narrowing the gap with urban, and the numbers could mean the sharp reduction in the poverty level in the country could be closer to 5% or less.
NITI Aayog CEO, Mr. BVR Subrahmanyam, has said that the latest survey of household consumption expenditure statistics has shown that rural consumption has remained robust, narrowing the gap with urban, and the numbers could mean the sharp reduction in the poverty level in the country could be closer to 5% or less. The numbers could have an implication for interest rate setting by RBI as the share of food and cereals is lower in the retail inflation index.
The survey showed that at current prices, rural monthly per capita consumption spending rose 164% from Rs. 1,430 in 2011-12 to Rs. 3,773 in 2022-23, while in urban centres, it shot up by 146%, from Rs. 2,630 in 2011-12 to Rs. 6,459 in 2022-23.
In rural areas, the share of food in monthly consumption has slowed to 46.4% in 2022-23 from 53% in 2011-12 while spending on non-food items rose to 54% from 47.15. Wherein in urban centres, the same trend was visible with spending on food slowing to 39.2% in 2022-23 from 43% in 2011-22 while non-food expenditure rose to 60.8% in 2022-23 from 57.4% in 2011-12, according to the survey.
In 2014, a panel headed by ex-RBI governor Mr. C Rangarajan had estimated poverty line as monthly per capita expenditure of Rs. 1,407 in urban areas and Rs. 972 in rural areas. The latest data showed that the bottom 5-10% of the population had an average monthly consumption expenditure of Rs. 1,864 in rural areas and Rs. 2,695 in urban centres.
The survey data shows that poverty levels in India are now significantly lower. As per the panel’s definition, a person spending Rs. 47 per day in cities and Rs. 32 in villages is below the poverty line. As per latest MPCE data, consumption expenditure of bottom 5-10% shows that poverty rates in India are now in low single digit, said Soumya Kanti Ghosh, part-time member of 16th Finance Commission and group chief economic adviser of SBI.
