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Poor in villages live on Rs 17 a day, in towns on Rs 23 a day: 2012

Mahendra Singh, TNN | Jun 21, 2013

The Times of India

Poor in villages live on Rs 17 a day, in towns on Rs 23 a day: Survey

The average monthly spending on all-India basis was around Rs 1,430 for rural India and around Rs 2,630 for urban India, a government survey has revealed. NEW DELHI: The poor in rural areas spend only Rs 17 per day while those living in cities and towns spend Rs 23 a day, a government survey has revealed.

The bottom 5% of the population had an average monthly per capita expenditure of Rs 521.44 in rural areas and Rs 700.50 in urban areas, according to National Sample Survey (NSS) data for 2011-12 (July-June).

The top 5% of the population had an average monthly spending of Rs 4,481 per month in rural areas and Rs 10,282 in urban areas.

While there is no upper limit for spending for the top 5% segment, the maximum spending by those falling at the bottom of the ladder is Rs 616 a month (Rs 20.5 a day) in rural areas and Rs 827 (Rs 27.5) in urban areas.

The average monthly spending on all-India basis was around Rs 1,430 for rural India and around Rs 2,630 for urban India. This means those living in cities are spending about 84% higher than their rural counterparts.

In cities and towns, food accounted for 42.6% of the value of household consumption which included 9% on beverages, refreshments and processed food, 7% on milk and milk products, and 6.7% on cereals and cereal substitutes. Education accounted for 6.9%, fuel and light 6.7%, conveyance 6.5%, and clothing and footwear 6.4%.

In rural India, food accounted for 52.9% of the value of consumption that included 10.8% on cereals and cereal substitutes, 8% on milk and milk products, 7.9% on beverages, refreshments and processed food, and 6.6% on vegetables.

Among non-food items, fuel and light for household purposes (excluding transportation) accounted for 8%, clothing and footwear for 7%, medical expenses for 6.7%, education for 3.5%, conveyance for 4.2%, other consumer services (excluding conveyance) for 4% and consumer durables for 4.5%.

Even in rural areas, spending on cereals has seen a declining trend as it came down from 18% in 2004-05 to 12% in 2011-12. In urban India, it came down from 10.1% in 2004-05 to 7.3% in 2011-12.

Apart from beverages, none of the food items such as grams, pulses, milk, fish, vegetables showed any noticeable increase in share in both rural and urban India. The spending on pan, tobacco and intoxicants fell noticeably over the years since 1993-94 though the decline appears to be flattening out.

The spending on "miscellaneous goods and services" category (including education, medical care and entertainment) has grown significantly — from 23.4% in 2004-05 to 26% in 2011-12 in rural areas and from 37.2% in 2004-05 to nearly 40% in urban areas.

As far as states are concerned, consumption expenditure in villages of Odisha and Jharkhand were the lowest, followed by Bihar, Madhya Pradesh and UP. In urban areas, Bihar had the lowest expenditure followed by Chhattisgarh, Odisha, Jharkhand and UP.

Rural and urban spending

Gujarat slides in both rural & urban spending

Data Raises Doubt Over Devpt Model

Subodh Varma TIMES INSIGHT GROUP

The Times of India 2013/07/22

How are people in their states actually faring? How does one know whether one ‘development model’ is better than another?

One way is to look at how much a person spends on an average every month; this gives an indication of how much people are earning. Comparing recently released data on consumer expenditure with data from a decade ago provides a fair idea of which state governments are delivering and which are sliding. There’s a surprise lurking there.

Gujarat slides down

Gujarat has slid from fourth to eighth in the ranking of states for rural spends, and from seventh to ninth in urban expenditure, according to a comparative analysis of data on monthly per capita spending between 2011-12 and 1999-2000, both of which are put out by the National Sample Survey Organisation.

Amartya Sen backs Bihar’s growth model

Nobel laureate Amartya Sen on Sunday backed Bihar’s growth strategy arguing that growth was not independent of social transformation.

“What is needed is an integrated approach for development and growth,” Sen said at a book release event. The noted economist suggested that without education and proper health facilities, it was difficult to achieve balanced growth. “Educated labour force is the biggest guarantor. Education and healthy labour force is able to produce everything from IT to auto parts,” Sen said.

At the same time, he recognized the impressive growth rate, of over 11%, recorded by the eastern state during the 11th five-year plan (2007-2012) and said it was an important indicator.

Sen’s praise for the Bihar model is significant because the build-up to the general elections has also been framed as a duel between competing models of growth. One is the inclusive growth model which UPA and Bihar claim to represent, which won praise from Sen. The other, Gujarat’s emphasis on higher rate as the solution to poverty reduction, is backed by the likes of Jagdish Bhagwati and Arvind Panagariya.

While the state ranks poorly on most human development indicators, its performance has improved in recent years, which economists say is driven by better administration and steps to improve literacy and health facilities. Bihar is demanding special state status — to access more central funds and offer tax incentives to attract investment to bolster its growth and development. Chief minister Nitish Kumar has been at the forefront of the demand and even organized a rally in the national capital to press for the tag.

Renowned economist Nicholas Stern, who has co-edited the book with Rajya Sabha member N K Singh, pushed for a special status tag. “From the point of view of poverty, distribution of income and point of view of demonstrating change, a special category status would be appropriate,” he said.