On Tuesday (27th February), a research report published by the State Bank of India (SBI) corroborated the findings of the Household Consumption Expenditure Survey (HCES), which was conducted by the National Sample Survey Office (NSSO).
It noted the positive impact that the schemes of the Union government had in reducing poverty, checking inflation, increasing the Monthly Per-capita Consumer Expenditure (MPCE) and bridging the urban-rural divide in spending power.
For instance, rural poverty has decreased from 25.7% (2011-12) to 7.2% (2022-2023) while urban poverty has reduced from 13.7% (2011-12) to 4.6% (2022-2023).
“Rural Poverty has thus staged a significant 440-basis point decline since 2018-19 and Urban Poverty a 170-basis point decline post-pandemic…This indicates that many Government programmes currently for those at the bottom of the pyramid are having a significant salutary impact on Rural Livelihood,” the SBI Research report said.
According to the report, the significant reduction in consumption inequality can be attributed to increased government spending on the development of physical infrastructure including rural roads and 4/8 lane national highways.
“Around 30% of the Rural MPCE is explained by factors that are endogenous to the Rural ecosystem. Such endogenous factors are mostly due to the initiatives the Government has taken in terms of DBT transfers, building Rural infrastructures, augmenting farmer’s income, improving the rural livelihood significantly,” it further emphasised.
The difference between rural and urban Monthly Per-capita Consumer Expenditure (MPCE) has decreased to 71.2% in 2022-20234 from 88.2% in 2009-2010.
Reportedly, the difference was as high as 90.8% in 2004-2005 but is now projected to reduce to 65.1% in 2029-2030.
According to SBI Research, the biggest beneficiaries of reducing consumption inequality are States such as Madhya Pradesh, Uttar Pradesh and Bihar.
The SBI Research report also noted, “India is becoming more aspirational as indicated by the increasing share of discretionary consumption (like spending on beverages, intoxicants, entertainment, durable goods, etc.) in rural and urban areas. The speed of aspiration is swifter in rural areas as compared to urban areas.”
Data reflects the status of India’s poverty level
The data provided in the NSSO survey also paints an accurate picture of the poverty level in the country. According to BVR Subramaniam, CEO of NITI Aayog, India’s poverty level has fallen to just five per cent, signalling an improvement in the nation’s economic landscape.
In light of this data, he asserted that there is now no scarcity issue in the villages. The assertion that village expenditures were declining and that the villages’ conditions remained unchanged was refuted by the CEO of NITI Aayog.
He underscored the narrowing gap between rural and urban consumption, suggesting a positive trajectory towards economic parity.
