250mn Indians spend Rs 14/day: Video

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The Indian economy may be registering strong growth, but nearly 20 per cent of the population or close to 250 million people of spent less than Rs 14 per person per day on consumption in 2004-05.

The average monthly per capita consumer expenditure(MPCE) in 2004-05 stood at Rs 559 in rural India and Rs 1,052 in urban India.

According to a National Sample Survey Organisation (NSSO) report on the level and pattern of consumer expenditure in 2004-05, Orissa, Chhattisgarh, Madhya Pradesh, Bihar, Jharkhand and Uttar Pradesh have remained the poorest states in the country in terms of MPCE of the rural population.

"Compared with 30 per cent at the all-India level, in Orissa and Chhattisgarh as many as 55-57 per cent of villagers were living below the MPCE level of Rs 365, or Rs 12 a day in 2004-05," the report said. Nearly 10 per cent of the nationwide rural population spent just Rs 9 per day.

The urban poor appeared to be slightly better off, with 30 per cent being able to spend Rs 580 per month, or Rs 19 a day. But 10 per cent of the urban population spent just Rs 13 a day in 2004-05. Urban poverty seems to be concentrated in those states where rural poverty is high, the report said.

In Bihar, as much as 55 per cent of the urban population spent Rs 19 per day, followed by Orissa (50 per cent), UP and Chhattisgarh (44 per cent), Madhya Pradesh (43 per cent) and Rajasthan (36 per cent).

Looking at the spending pattern for every rupee by an average Indian in rural and urban areas for 2004-05, the spend was 55 paise and 43 paise on food, the highest among all amenities.

The slow increase in the rate of literacy had an impact on spending on education, as educational expenses formed only three per cent and five per cent of expenditure in rural and urban areas of the country in the period of the survey.

However, the share of fuel and light in total consumer expenditure rose from under six per cent to 10 per cent in both rural and urban areas. The share of clothing in total consumer expenditure fell from 7-8 per cent to 4.5 per cent in rural India and from 5-7 per cent to four per cent in urban India between 1972-73 and 2004-05, the report added.

Overall, rural and urban Indian consumers spent 10 per cent on fuel and light out of their total expenditure, while clothing, bedding and footwear took up five per cent each.

Despite increased allocations for improving rural health, medical expenses accounted for seven per cent of total consumer expenditure in rural India and five per cent in urban India.

Between 1972-73 and 2004-05, the share of food in total consumer expenditure also fell from 73 per cent to 55 per cent in rural areas and from 64 per cent to 42 per cent in urban areas.