Gujarat’s poorer sections forced to spend higher amount on essential food items

Purchasing power of 20% poorest sections in rural areas (in Rs)

By Rajiv Shah

Gujarat’s people, especially the poor, stand vis-a-vis other states with regard to their purchasing power. The latest National Sample Survey Organisation report, released in late February 2014, gives some indication.
A comparison of poverty levels of 17 major Indian states in the latest National Sample Survey (NSS) report, “Level and Pattern of Consumer Expenditure, 2011-12”, has suggested that Gujarat ranks No 8th in purchasing power among the poorest 20 per cent of the rural population and No sixth in purchasing power among the poorest 20 per cent of the urban population. Released in February 2014, the report, based on the survey which was carried out from mid-2011 to mid-2012, suggests that the spending capacity of 20 per cent of Gujarat’s population is less than Rs 993 per capita per month in the rural areas, and Rs 1449 per capita per month in the urban areas.

Purchasing power of 20% poorest sections in urban areas (in Rs)

Identifying purchasing power as monthly per capita consumer expenditure (MPCE), the report has found that the spending capacity of the poorest 20 per cent of strata of as many as seven states was higher than that of Gujarat – Punjab tops the list in the rural areas with a purchasing power of up to Rs 1,378, followed by Kerala (Rs 1,327), Haryana (Rs 1,307), Andhra Pradesh (Rs 1,138), Maharashtra (Rs 1,039), Rajasthan (Rs 1,022), and Tamil Nadu (Rs 1,003). As for the urban areas, the poorest 20 per cent of strata of five states display a higher spending capacity than Gujarat – here, Haryana tops the list with Rs 1,735, followed by Maharashtra (Rs 1,652), Punjab (Rs 1,518), Andhra Pradesh (Rs 1,509) and Kerala (Rs 1,464).

Average monthly per capita expenditure (in Rs)

The report has also found that the top 20 per cent of the rural population of six out of 17 major states has a better purchasing power capacity than Gujarat. Thus, Gujarat’s 20 per cent of the rural strata spends more than Rs 1,924 per capita per month, which is lower than Andhra Pradesh (Rs 2,149), Haryana (Rs 2,814), Kerala (Rs 3,118), Maharashtra (Rs 1,960), Punjab (Rs 2,845), and Tamil Nadu (Rs 2,150). As for the urban areas, Gujarat’s top 20 per cent of the richest 20 per cent strata has the spending capacity of Rs 3,256 per capita per month or more, which is less than seven other states – Andhra Pradesh (Rs 3,600), Haryana (Rs 4,419), Karnataka (Rs 3,580), Kerala (Rs 4,086), Maharashtra (Rs 3,907), Punjab (Rs 3,651), Tamil Nadu (Rs 3,411), and West Bengal (Rs 3,435).
A further comparison between the 17 states, for which the NSS report has given separate data, suggests that the average MPCE of Gujarat in the rural areas is Rs 1,536, which is lower than eight other states – Andhra Pradesh (Rs 1,754), Haryana (Rs 2,176), Karnataka (Rs 1,561), Kerala (Rs 2,669), Maharashtra (Rs 1,619), Punjab (Rs 2,345), Rajasthan (Rs 1,598), and Tamil Nadu (Rs 1,693). The all-India average for rural MPCE is Rs 1,430, which is less than Gujarat’s. As for the urban areas, as many as eight states have higher MPCE than Gujarat (Rs 2,581). These are – Andhra Pradesh (Rs 2,685), Haryana (Rs 3,817), Karnataka (Rs 3,026), Kerala (Rs 3,408), Maharashtra (Rs 3,189), Punjab (Rs 2,797), Tamil Nadu (Rs 2,622), and West Bengal (Rs 2,591). The all-India average is Rs 2,630.

Per cent spending on food items in rural areas

Lower the spending capacity, the higher you tend to spend on food. Thus, in the rural areas, 55 per cent of the MPCE goes into food items, which is higher than the national average of 53 per cent. Rural households of only poorer states tend to spend a higher proportion than Gujarat, such as Assam (61 per cent), Bihar (59 per cent), Jharkhand (58 per cent), West Bengal (58 per cent) and Odisha (57 per cent). As for Gujarat’s urban households, their 45 per cent of the MPCE on an average goes into food items, which is again higher than the national average of 43 per cent. The MPCE of only poorer states is higher than Gujarat’s – Assam 48 per cent, Bihar 51 per cent, Jharkhand 47 per cent, and so on.
Gujarat’s poorer sections, obviously, tend to spend a higher amount on food items than the richer sections. Thus, the poorest 20 per cent of the state’s rural population spends 62 per cent and urban population spends 57 per cent of the total expenditure on food items. This is against the richest five per cent the population spending 37 per cent of its total expenditure on food items in the rural areas, and 29 per cent of its total expenditure on food items in the urban areas. The poorer sections of rural Gujarat spend a higher percentage of expenditure on food items compared to only few Bimaru states such as Assam (64 per cent) and Bihar (64 per cent). The situation is not very different with urban areas – Bihar’s poorest 30 per cent spends 61 per cent of total expenditure on food items. The respective figure for Jharkhand is 58 per cent, Odisha 59 per cent and UP 59 per cent.

Per cent spending on food items in urban areas

Giving a general idea of inter-state comparisons on purchasing power, the NSS report comments, “Urban MPCE was lowest in Bihar (Rs 1,507). No other major State had urban MPCE below Rs 1860. Two other major States had average MPCE below Rs 2000 – Chhattisgarh (Rs 1,868) and Odisha (Rs 1,941). In Jharkhand, Uttar Pradesh and Madhya Pradesh, average MPCE was between Rs 2010 and Rs 2060.” It adds, “While average urban MPCE was higher than average rural MPCE across the major states, the urban-rural difference varied widely across states.”
Pointing out that “average urban MPCE was only 19 per cent higher than average rural MPCE in Punjab, only 28 per cent higher than average rural MPCE in Kerala, and only 34% higher in Bihar”, the report states, “In West Bengal and Jharkhand, on the other hand, average urban MPCE was around double the average of rural MPCE. In Maharashtra, per capita expenditure in the urban sector was 97 per higher than in the rural, and in Karnataka and Odisha, it was 94 per cent higher. It underlines, “States with higher rural MPCE than the all-India average tended to have urban MPCE above the all-India average as well. Exceptions were Gujarat, Rajasthan and Tamil Nadu, where MPCE was above the all-India average in the rural sector but below the all-India average in the urban sector.”
The report further said, “The median level of rural MPCE was about Rs 1200 – half the rural population belonged to households with MPCE below this level. In urban India the median level of MPCE was about Rs 2020 – half the urban population had MPCE below this level.” Then, “Roughly 64.9 per cent of the rural population of India had MPCE below the rural average of Rs 1430 and 66.7 per cent of the urban population had MPCE below the urban average of Rs 2630.” It adds, “Over 20 per cent of the rural population of India had MPCE below Rs 850 and nearly 30 per cent had MPCE below Rs 960. Less than 20 per cent had MPCE above Rs 1800 and about 10 per cent had MPCE above Rs 2300.”
The report comments, “More than 10 per cent of the urban population of India had MPCE below Rs 1000. More than 30 per cent had MPCE below Rs 1500. Less than 20 per cent had MPCE above Rs 3400, and about 10 per cent had MPCE above Rs.4600. More than 50 per cent of the rural population of Odisha had MPCE below Rs 900 and more than 40 per cent had MPCE below Rs 820. In Jharkhand and Chhattisgarh 40 per cent of the rural population had MPCE below Rs.840 and 50 per cent had MPCE below Rs 940. In Kerala and Punjab more than 50 per cent of the rural population had MPCE above Rs 1,950 and more than 30 per cent had MPCE above Rs.2500. More than 40 per cent of the urban population of Bihar and Chhattisgarh had MPCE below Rs.1200, compared to less than 10 per cent in Haryana, Maharashtra, Punjab and Kerala.”

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