India witnessed a fall in spending inequality in 2022-23 compared to 2011-12, according to a detailed report on Household Consumption Expenditure Survey (HCES) released by the Ministry of Statistics and Programme Implementation (MoSPI) on June 7.
The Gini coefficient for total consumption expenditure, the most commonly used measure of inequality, declined for both rural and urban India.
While it decreased to 0.266 in 2022-23 from 0.283 in 2011-12 for the rural sector, for urban households it fell to 0.314 from 0.363 for the same period.
Typically used as a measure of income inequality, the Gini coefficient measures inequality on a scale from 0 to 1, where higher values indicate higher inequality. This can sometimes be shown as a percentage from 0 to 100 percent as the Gini Index.
In February, the government had released a factsheet based on the findings of the survey on household consumption patterns. It has now released the full report on the same,, which offers granular data.
The detailed report further revealed that the average monthly per capita consumption expenditure or MPCE of the top 5 percent of the population at Rs 10,501 was about 7.6 times of the bottom 5 percent of India’s rural population at Rs. 1,373 in 2022-23.
This is in line with the finding that the average estimated MPCE in 2022-23 was Rs 3,773 in rural
India and Rs 6,459 in urban India.
Thus, the per capita expenditure level in the urban areas, in nominal terms, and ignoring rural-urban differences in price levels, has been about 71 percent more than that in the rural areas.
The gap in average or MPCE between the bottom 5 percent and top 5 percent of the population is more pronounced in the urban areas than the rural areas.
Among the major states, MPCE was found to be the lowest in Chhattisgarh for rural (Rs 2,466) as well as urban (Rs 4,483) households, while it was the highest in rural Kerala at Rs 5,924 and urban Telangana at Rs 8,158.
A wide variation in urban-rural difference in average MPCE was observed across the 18 major states. It was the lowest in Kerala (about 19 percent) and highest in Chhattisgarh (around 82 percent), the state with the lowest average MPCE in both rural and urban areas among those surveyed.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
