Urban India spend 88% more than rural class

By agencies   |   Thursday, 24 November 2005, 08:00 Hrs
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NEW DELHI: The consumption-spending gap between urban and rural India has further widened, a latest survey by NSSO says.

The urban person spend about 88 percent more than their rural counterparts on food, education, entertainment, fuel and lighting, clothing and durables, the National Sample Survey Organization said.

The survey said an urban person spent $24 per month on consumer items compared to $12 by his counterpart in rural areas.

The 60th round survey was conducted between January and June 2004. In the previous round of the survey—conducted between January and December 2003—the gap between spending was 85 percent; with average monthly per capita consumer expenditure of $23 in the urban areas and $12 in rural areas.

The spending was higher in urban areas across all items other than cereals and cereal substitute. And on education and customer services, spending of urban areas is about 300-400 percent more than that of people in rural India.

One part of the reason for the wide gap is the difference in price levels in rural and urban areas. On an average, the price levels in urban areas are assumed to be 15 percent higher than in the rural areas. If the urban spending is adjusted for the difference in price levels, the gap would narrow to about 63 percent.

Also, the relatively bigger rise in consumer spending in urban areas at 3.7% from the previous round of the survey compared to 2% rise in rural areas has widened the gap between rural and urban spending.

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