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Resource centre on India's rural distress
 
 

RURAL URBAN GAP SHRINKS BUT INEQUALITY RISES

The much awaited results of the National Sample Survey have once again spilled the beans about India’s effort in fighting poverty. The provisional results of the 68th Round of National Sample Survey (NSS) of household consumption expenditure (which is often taken as a proxy for income) finds that the average monthly per capita expenditure (MPCE) at current prices in urban areas (Rs. 2401.68) is 1.87 times more than the average MPCE in rural areas (Rs. 1281.45). During the 66th Round of NSS, the average MPCE at current prices in urban areas (Rs. 1785.81) was 1.92 times more than the average MPCE in rural areas (Rs. 927.7). This suggests that rural-urban gap is closing down.  

How did it happen? At 2004-05 constant prices, the average MPCE in rural areas has increased by 18.06 percent between 66th Round (Avg. MPCE=Rs. 599.06) and 68th Round (Avg. MPCE=Rs. 707.24). However average MPCE in urban areas grew by 13.31 percent between the 66th (Avg. MPCE=Rs. 1785.81) and 68th Rounds (Avg. MPCE=Rs. 2401.68). One may argue here that ‘Bharat’ is catching up with ‘India’.  

The Millennium Development Goals Report 2012 says that India’s poverty rates [in terms of international poverty line of $ 1.25 per day (PPP) per person] fell from 51% to 37% between 1990 and 2008. But given the rise in food prices in the recent times, which pushed millions into poverty and hunger, many believe that India will not been be able to cut extreme poverty rate to half its 1990 level by 2015.

Besides, as per NSSO, there still exists a huge gulf in consumption expenditure between rural and urban India, which itself explains that the growth process in India is affected due to relatively lower purchasing power of the rural population. Rural distress is a deep-rooted problem yet to be recognized by the establishment.

Although the detailed results of the 68th Round are yet to be out somewhere next year, an attempt has been made this time by the NSS to compile and present the provisional results.         

While the poorest 10% of India’s rural population had an average MPCE of Rs. 503. 49 (Rs. 16.78 per day), the poorest 10% of the urban population had an average MPCE of Rs. 702.26 (Rs. 23.41 per day).

NSS table
 
Inequality in urban India is starker as compared to rural India. During the 68th Round, the richest 10 percent of the rural population had an average MPCE of Rs. 3459.77, about 6.9 times that of the bottom 10%. However, richest 10 percent of the urban population had an average MPCE of about 10.9 times that of the bottom 10% (See: Table 1).  During the 66th Round of the NSS, it was found that the top 10% of the rural population had an average MPCE of Rs. 2394.66–about 6.4 times that of the bottom 10%. The top 10% of the urban population had an average MPCE of Rs. 5673.16–about 10.9 times that of the bottom 10%. This clearly shows the yawning gap between the rich and poor in India as a whole (See: Table 1).

About 60% of rural population had MPCE below Rs. 1162 (Rs. 38.73 per day), while 10% had MPCE above Rs. 2054 (Rs. 68.47 per day).
 

References

 

Provisional Resultsof Household Consumer Expenditure Survey of NSS 68th Round (July 2011 – June2012)

http://mospi.nic.in/Mospi_New/upload/nss_press_note_1aug12.pdf

 

Rural Urban Divide: ATale of Two Indias

http://www.im4change.org/news-alert/rural-urban-divide-a-t
ale-of-two-indias-15424.html

 

Table 1A-R, AppendixA Table, A-12; Table 1A-U, Appendix A Table, A-12,

NSS Report No.538:Level and Pattern of Consumption Expenditure

http://www.im4change.org/docs/240NSS_Report_538.pdf

 

Disparity in incomegetting sharper, NSSO data shows-Asit Ranjan Mishra

Live Mint, 2 August, 2012, http://www.im4change.org/rural-news-update/disparity-in-in
come-getting-sharper-nsso-data-shows-asit-ranjan-mishra-16
463.html

 

Inequality rising in India, showsdata on spending-Nitin Sethi, The Times of India, 2 August, 2012, http://www.im4change.org/rural-news-update/inequality-risi
ng-in-india-shows-data-on-spending-nitin-sethi-16462.html

 

'10% of Rural IndiaLives on Less Than Rs 17 a Day', Outlook, 1 August, 2012, http://www.im4change.org/rural-news-update/03910-of-rural-
india-lives-on-less-than-rs-17-a-day039-16461.html  

 

NSS data showsimprovement in living standard of the poorest-Surabhi, The Indian Express, 2 August, 2012, http://www.im4change.org/rural-news-update/nss-data-shows-
improvement-in-living-standard-of-the-poorest-surabhi-1646
8.html

 

Rural expenditure upby 33 per cent: NSSO-Richard Mahapatra, Down to Earth, 1 August, 2012, http://www.im4change.org/rural-news-update/rural-expenditu
re-up-by-33-per-cent-nsso-richard-mahapatra-16471.html

 

NSS: Poorest live onRs 23.40 in cities, Rs 16.78 in villages-Surabhi, The Indian Express, 1 August, 2012, http://www.im4change.org/rural-news-update/nss-poorest-liv
e-on-rs-23-40-in-cities-rs-16-78-in-villages-surabhi-16469
.html


Rural income on rise:study-Asit Ranjan Mishra, Live Mint, 1 August, 2012, http://www.im4change.org/rural-news-update/rural-income-on
-rise-study-asit-ranjan-mishra-16470.html

 

MDG Report 2012,UNDP,

http://www.undp.org/content/dam/india/docs/pub-mdgs/The_MD
G_Report_2012.pdf