Urban-rural spend parity better in Gujarat than most states

Gujarat may not figure among the country’s top 5 states in terms of highest average monthly per capita expenditure (MPCE), but it has scored better than most in rural-urban expenditure parity. Data from National Sample Survey Organisation (NSSO)’s 68th round of household expenditure in India for 2011-12 suggests that income distribution between urban and rural areas of Gujarat is far better than in other states.

For example, an average urbanite in Gujarat spent 68% higher than their rural counterpart during the survey period. This ratio was significantly higher, at around 100%, in West Bengal, Jharkhand, Maharashtra, Odisha and Karnataka.

This translates into people in rural areas of these states having less amount of disposable income to buy food or other necessities as against those in Gujarat.

Average consumer expenditure in rural areas of Gujarat increased by 39% to Rs1535.66 in 2011-12, since the previous such survey in 2009-10. While, per capita consumer expenditure for urban areas of the state was Rs2521.28 in 2011-12, 33% higher than Rs1909.06 previously. The average growth rate at the national level for rural and urban areas stood at 37% and 34% respectively.

Moreover, in terms of the income of the bottom 20% people (consumers with the lowest income) of the income pyramid too, Gujarat fared well compared to other large states.

The number of people from Gujarat in this bracket was just 17,000, as against the national average of 43,000. Even the percentage of Gujarat’s rural population that falls in this income bracket is lower. Here, 5% rural people figure in the bottom of the pyramid, compared to 6% in Bihar and Tamil Nadu. In urban areas of the state, the number is just 10,000 or 4.5% of the total estimated urban population. In comparison, Maharashtra, Tamil Nadu, Bihar, Madhya Pradesh and Rajasthan have higher numbers of urban poor.

Further, there are less people in the top 20% (consumers with highest income) of the pyramid in Gujarat, as well. With 88,000 people in urban areas of the state falling in this category, Gujarat ranks the lowest when compared to Maharashtra, Karnataka, Rajasthan, Tamil Nadu or Madhya Pradesh.

Only 0.5% of the rural population of the state falls in the rich category, which is at par with all the large states of the country. However, the number of people that comprise the top 20% category in rural areas of the state is 168,000, which is double that of the urban rich here.

With a higher number of people at the top of the pyramid being in rural areas, the spread of economic growth in the state is not only limited to urban centres.