Gujaratis' purchasing power rising at a much slower pace than most states

By Rajiv Shah
New data released by the National Sample Survey Organisation (NSSO), in the report “Key Indicators of Household Consumer Expenditure in India”, released in June 2013, have suggested that the purchasing power of the people, as reflected in the monthly per capita expenditure (MPCE), has been rising at a much slower pace in Gujarat than most states of India. As a result, Gujaratis, on an average, are forced to spend a higher percentage on food items, as against non-food items, which are a secondary priority of people. Non-food items, according to the NSSO, include transport, fuel, light, clothing, footwear, education, medical bills, entertainment, paan and cigarettes or bidis, and durables.
The figures show that whether it is the rural areas or the urban areas, Gujarat’s households spent more on food items than the all-India average in 2011-12. Thus, as against 52.9 per cent spending on food items in rural India, Gujarati households’ spent 54.9 per cent, suggesting a clear gap of three percentage points. Similarly, as against urban India’s average per capita spending of 42.6 per cent on food items, Gujarati households on an average spent a higher proportion on food items, 45.2 per cent, suggesting a .gap of 2.8 per cent
The per capita spending on food items in Gujarat has been on higher side compared to several states – Andhra Pradesh (51.4 per cent rural, and 42.3 per cent urban), Chhattisgarh (52.7 per cent rural and 40.2 per cent urban), Haryana (52.1 per cent urban and 39.2 per cent rural), Himachal Pradesh (47.3 per cent rural and 42.4 per cent urban), Karnataka (51.4 per cent rural and 40.1 per cent rural), Kerala (43.0 per cent rural and 37.0 per cent urban), Madhya Pradesh (52.9 per cent rural and 42.2 per cent urban), Maharashtra (52.4 per cent rural and 41.6 per cent urban), Punjab (44.1 per cent rural and 41.0 per cent urban), Rajasthan (50.5 per cent rural and 44.8 per cent urban), Tamil Nadu (51.5 per cent rural and 42.7 per cent urban), and Uttar Pradesh (53.0 per cent rural and 44.0 per cent urban). The states which spent more than Gujarat’s on food items were Bihar, Assam, Odisha, Jammu & Kashmir and Jharkhand, all known for backwardness.
Also it is revealing that Gujaratis' spending on the food items went down in the rural areas from 57.7 per cent in 2009-10 to 54.9 per cent in 2011-12, a fall of 2.8 per cent, as against the all-India average of 4.1 per cent. As for the urban areas, it down from 46.2 per cent in 2009-10 to 45.2 per cent in 2011-12, a fall of exactly one per cent, as against the all-India average of 1.8 per cent.
It may also be noted that the average MPCE of rural Gujarat is Rs 1,535.66 which is little higher than all-India (Rs 1429.96). Yet, the fact is, the rural population of several states has a higher spending capacity than Gujarat’s – Andhra Pradesh (Rs 1753.96), Chhattisgarh (Rs 2,762.11), Haryana (Rs 2,176.04), Himachal Pradesh (Rs 2,034.15), Himachal Pradesh (Rs 1742.64), Jharkhand (Rs 1,561.28), Karnataka (Rs 2,668.73), Maharashtra (Rs 1619.22), Punjab (Rs 2344.66), Rajasthan (Rs 1,597.50), Tamil Nadu (Rs 1,692.93), and Uttarakhand (Rs 1725.77).
What is disconcerting is that, the urban households’ spending capacity is worse than all-India average – it was Rs 2,581.28 in the state as against Rs 2,629.65 of the country as a whole. Only the so-called Bimaru states had a worse urban MPCE than Gujarat’s – Rs 2,189.15 in Assam, Rs 1,506.58 in Bihar, Rs 1,867.86 in Chhattisharh, Rs 2,485.34 in Jammu & Kashmir, Rs 2,018.29 in Jharkhand, Rs 2,058.02 in Madhya Pradesh, Rs 1,940.61 in Odisha, Rs 2,442.40 in Rajasthan, and Rs 2,051.22 in Uttar Pradesh. All other major states had a higher urban MPCE than Gujarat’s, and Kerala topped the list with Rs 3,408.45 in Kerala, followed by Himachal Pradesh Rs 3,258.54. Both the states have some of the best social sector indicators, too.