The average amount spent by an Indian has gone up by 66% in rural areas 70% in urban areas — with Keralites being the “richest” among the big states, according to the results of the last year’s expenditure survey the Government of India’s National Sample Survey Office (NSSO).
The average (per head) expenditure figures are an important reflection of average incomes in these areas as people are more likely to disclose what they have bought rather than how much money they are making.
The Survey shows Kerala, which hardly has any industry, as the ‘richest’ state in the country with an average expenditure of Rs 1,835 per villager and Rs 2,413 per city-dweller per month during 2010.
Though the average monthly expenditure in cities was higher in Maharashtra by 22 rupees, given the higher weightage of population in the rural areas and the poor expenditure level of villagers in Maharashtra, Kerala has emerged as the ‘richest’ state by expenditure. The numbers exclude Delhi and other smaller territories (see chart.)
Kerala was followed by Punjab and Haryana, followed by Andhra Pradesh and Maharashtra. Karnataka and Gujarat followed close behind, while the poorest state was Bihar. The average Bihari spends less than half of what the average Keralite spends.
Punjab had the distinction of having the least amount of disparity between the rural expenditure and urban expenditure. The urban Punjabi spent only 27% more money than the rural Punjabi, followed by Kerala with 31% disparity.
Maharashtra was followed by Chhattisgarh and West Bengal, followed by Karnataka where city-incomes have got a boost from the IT industry.
The average city-dweller in India continues to have access to double the funds that his village counterpart has, maintaining the trend that was seen in the survey conducted five years ago as well.
While expenditure has risen by 66% and 70% respectively, the relative ratios between the rural and urban expenditures (and therefore, income levels) is remaining at the 1:2 level.
The average expenditure by a rural Indian was Rs 1054 per month and that of an average city-Indian was Rs 1984 per month, implying around Rs 5,300 for a five-member household in the village and around Rs 9,925 for an urban family.
Interestingly, the disparity between the urban and rural income is not so much at the poorer levels. The disparity, rather, is the result of the much higher income of the city-based elites compared to their village brethren.
As a result, while the bottom 10% (the poorest 10%) of village India survives on Rs 453 per month, their urban cousins don’t get double the amount (Rs 900), but only Rs 599, around 33% more.
On the other hand, the top 10% of the rural folk had Rs 2,517 as their average per-head monthly income, while the top 10% in the cities had Rs 5,863 per month per person — substantially more than double.
Half of rural Indians live on Rs 895 per month or less, while half of urban Indians live on Rs 1,500 per month or less, indicating that the poverty was higher than what is suggested by the averages (Rs 1054 and Rs 1984 per month for rural and urban.)
A look at the distribution of wealth chart (see below) also shows that disparity is higher in the cities compared to the villages.
While the top 10% of the villages have 5.6 times the money to spend compared to the bottom 10% of the villages, the top 10% of the cities have nearly 10 times the money that their less fortunate cousins in the same city has.
The survey was conducted by the NSSO over the one-year period from July 2010 to June 2011 in 7,524 villages in rural areas and 5,284 urban blocks and is by far, the biggest such survey in India and perhaps in the World.