What are Indians spending their money on? Recently released numbers from the National Sample Survey for 2011-12 provide some details. First, though, how much is there to spend? The consumption figures shown in Figure 1 are revealing of how some states are doing better than others. The rural parts of east-central India continue to be relatively deprived, with consumption expenditure in some cases less than half what it is in villages of the Northwest. Standing out in consumption is rural Kerala, with monthly per capita expenditure of Rs 2,669. Urban Kerala, too, spends more per month than anywhere else in the country, except for Haryana (which is probably biased by Gurgaon). Differences between urban and rural consumption are also worth a look: West Bengal and Jharkhand in particular have failed to deal well with urban-rural inequality. Another odd outlier is Manipur, apparently doing very poorly with urban poverty. Unsurprisingly, therefore, as Figure 2 shows, Manipur and east-central India lead the country in terms of how much of monthly per capita expenditure (MPCE) in rural areas is spent on cereals, particularly relevant for the food security Bill. In well-off parts, like rural Kerala or Punjab, it is below six per cent; in most of the country it is around 10 per cent of MPCE; but in West Bengal, Jharkhand, Bihar and Odisha, it is over 15 per cent, and in Manipur it is 20 per cent.
However, it is worth noting that the fraction of MPCE spent on food does not vary so much, between 50 and 60 per cent across India. An explanation of this comes in Figure 3, which shows that in both rural and urban India, the fraction of MPCE spent on cereals has declined precipitously since 1991. Meanwhile, in rural areas, the proportion spent on milk and milk products has actually seen a slight increase. Also in Figure 3 is the revelation that urban consumers have seen their relative expenditure on fuel and lighting decrease over the past decade, perhaps why they are willing to bear increases.
Finally, it is worth noting that "miscellaneous" expenditure is now almost 40 per cent of the monthly spending of urban households, as shown in Figure 4. Rent is normally only seven per cent of monthly expenditure. But a worrying item is the amount spent on healthcare: Seven per cent of monthly expenditure in rural areas is going on medical care.
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