The National Sample Survey Office (NSSO) has released a report indicating a reduction in inequality in both rural and urban areas of India between 2011-12 and 2022-23. The report provides detailed information on consumption expenditure trends after more than a decade, with the last report released in 2011-12. A 2017-18 survey and report were prepared but junked by the government after media leaks suggested a fall in average spending between 2011-12 and 2017-18. The latest survey was delayed due to the pandemic.
The reported average monthly per capita expenditure figures for the top 5% of rural and urban households indeed appear relatively low compared to other estimates or anecdotal evidence of high-income households’ spending patterns. Kerala emerged as the richest state in rural areas, with a relatively high per capita consumption expenditure of ₹ 5,924 per month. Similarly, Telangana’s position as the richest state in urban areas, with a per capita consumption expenditure of ₹ 8,158 per month, is likely a reflection of the state’s urbanization and economic development trajectory.
The NSSO’s release of the HCE report, which provides detailed insights into consumption expenditure trends over a decade, is a crucial step in understanding the dynamics of India’s economy. The delay in the latest survey due to the pandemic underscores the challenges external factors pose in data collection and analysis. Additionally, the mention of the 2017-18 survey being junked by the government following media leaks suggests the sensitivity surrounding economic data and its implications.
The report’s data on consumption expenditures for major states offers valuable insights into regional variations in economic well-being and consumption patterns within India. The decrease in the share of consumption expenditure accounted for by the top 10% of households, alongside an increase in the share held by the bottom 50%, signifies a narrowing of the consumption gap between different income groups. However, the observation that inequality has decreased less in rural areas compared to urban areas underscores the nuanced nature of economic development and distributional dynamics across regions.
It is important to note that NSSO surveys may underestimate consumption inequality due to the potential undercounting of the rich. Despite this potential limitation, the report provides valuable insights into the economic landscape of India and highlights the need for continued efforts to address economic disparities and promote inclusive growth.
