Rural consumption on the rise: Rural consumption has risen faster than urban, narrowing the gap between rural and urban consumption in India, BVR Subramanyam, the CEO of Niti Aayog said on Sunday.

According to Subramanyam, the gap between rural and urban consumption has come down from 84 per cent in 2011-2012 to 71 per cent in 2022-2023. He added further that the gap between urban and rural consumption was at its peak of 91 per cent in 2004-2005.

“The Gini Coefficient for rural and urban will also come down,” Subramanyam opined.

Rural and urban consumption

Subramanyan also threw light on the consumption pattern and said,“ Rural incomes went up by 2.6 per cent, and similarly, the urban incomes went up by 2.5 times.”

Another big highlight of the survey was the decline in the consumption of cereals and food. Throwing light on cereal consumption, he said, “The cereal consumption as a share of total consumption has gone down from 22 per cent in 1999-2000 to 10.7 per cent in 2011-2012, to less than 5 per cent in rural India.”

In rural India, the total consumption of food as a share has gone down from almost 60 per cent in 1999-2000 to 53 per cent in 2011-2012, and finally to 46 per cent now. He went on to add that the total consumption of food as a share is less than 50 per cent for the first time ever.

As far as urban India is concerned, cereal consumption as a share has gone down from 12 per cent in 1999-2000 to 6 per cent in 2011-2012, to less than 4 per cent now.  Similarly, the total consumption of food as a share has gone down below 40 per cent for the first time ever.

A love affair with beverages, processed food, and durables

According to the latest Household Consumption Expenditure Survey, the consumption of food as a share has gone down. On the other hand, the consumption of beverages, processed food milk, and fruits is going up. “ Which is an indication of more diverse and balanced food consumption.

In rural India, the consumption of beverages and processed food as a share has gone up from 4.19 in 1999-2000 to 7.90 in 2011-2012, and finally to 9.62 in 2022-2023.

Similarly, the consumption of conveyance and durables like TVs and fridges has gone up significantly.  The consumption of conveyance as a total share has also risen from 23.99 in 2011-2012 to 7.55 per cent in 2022-2023. Also, the consumption of consumer services excluding conveyance has risen sharply from 3.99 per cent in 2011-2012 to 5.08 per cent in 2022-2023.

In urban India, the story is almost the same. The consumption of conveyance as a share has gone up from 6.52 per cent in 2011-2012 to 8.59 per cent in 2022-2023.