An Analysis of Changing Rural-Urban Consumption Pattern in India

It's widely known that consumption expenditure is one of the major components of GDP and it is equally important to both macro-economists and micro-economists. The paper focuses on studying the trend of private final consumption expenditure in the Indian economy over the last four decades (1972-73 to 2011-12). The study has also analysed the trend of food and non-food consumption pattern in both urban and rural areas and interstate differences in consumption pattern over the same period by using data from NSSO survey reports, RBI and CSO. The findings of the study present that from 1972-73 onwards there has been a shift from traditional food items to non-food items, however the expenditure on food continued to remain higher in rural areas as compared to urban areas.Traditional food basket dominated by cereals among other changes is now seeing higher expenditure on beverages and milk & milk products. Analysis of non-food expenditure showed that from 1972-73 till 2011-12, weightage of miscellaneous goods & services has risen, these include educational and medical expenses, etc. in both urban and rural areas. The state-wise analysis of monthly percapita consumption expenditure revealed that both in urban and rural areas, the states that have overall high per-capita expenditure also have both high food and non-food expenditure. It further pointed that there are fewer states above the all-India average in urban areas than rural areas. Findings further show that non-food consumption expenditure carries higher weightage in urban areas compared to rural areas.