India's Rural-Urban Consumption Gap Narrowing: SBI Report

A State Bank of India report reveals a notable reduction in consumption inequality between rural and urban India. The gap in monthly per capita consumption has decreased significantly, driven by government initiatives like direct benefit transfers. This reflects more equitable income distribution and convergence in consumption patterns.

A recent report by the State Bank of India highlights a significant reduction in the consumption inequality between rural and urban regions in India. The study reveals that the gap in monthly per capita consumption expenditure has narrowed considerably, dropping from 88.2% to 69.7% of rural MPCE since 2009-10.

This positive trend is primarily attributed to several government initiatives, including direct benefit transfers and improvements in rural infrastructure. The efforts aimed at increasing farmers' income and enhancing rural livelihoods have played a crucial role in shrinking the inequality.

The report further examines consumption disparities within income classes in both rural and urban areas. Findings indicate that rural inequality, as measured by the Gini coefficient equivalent, decreased from 0.365 to 0.306, while in urban areas, it fell from 0.457 to 0.365. Additionally, consumption patterns across various income classes have become more uniform between these regions, with the Gini-equivalent figure dropping from 0.560 to 0.414.

States like Bihar and Rajasthan, traditionally seen as developing, are showing significant progress in narrowing the rural-urban consumption gap, underscoring the influence of rural economies. The report also notes increasing consumption uniformity among the lower income bracket across the nation, with over 60% having consumption levels below the national average.

These developments signal a reduction in economic disparities and promote inclusive growth throughout India, reflecting improved living standards for a significant portion of the population.

(With inputs from agencies.)