Datanomics: Urban areas record higher consumption expenditure disparity

Monthly consumption expenditure by Scheduled Tribe (ST) households is 17.2 per cent less in rural areas and 13.5 per cent less in urban areas compared to the national average in FY24 (July-June)

Urban areas present significantly greater consumption disparity than rural areas. Scheduled Caste (SC) households witnessed a 5.6 per cent monthly consumption expenditure gap in rural areas and a 17 per cent in urban areas compared to the national average. Compared to 2022-23, the rural gap has narrowed from 5.8 per cent, while the urban shortfall has slightly changed, according to the analysis of latest Household Consumption Expenditure Survey (HCES).  

The monthly consumption expenditure by the Scheduled Tribe (ST) households was 17.2 per cent less in rural areas and 13.5 per cent in urban areas compared to the national average in 2023-24 (July-June). This represents only a slight improvement from 2022-23 when the rural deficit was 19.5 per cent and the urban shortfall was 16.1 per cent. 

Other Backward Class (OBC) households in the urban areas spent 3.4 per cent less than the national average in 2023-24, reflecting a marginal improvement from 2022-23 when their spending deficit was 4.2 per cent. 

The higher cost of living, coupled with the wage gap, limits the purchasing power of marginalised groups, leading to greater 

financial stress. 

The wage disparity further amplifies these challenges. Casual wage labourers from SC and ST communities earn significantly less than their counterparts, with a 10.2 per cent wage gap, according to a study by Azim Premji University for 2023. 

The urban-rural divide within marginalised communities suggests that while urbanisation might offer a promise of better job opportunities, it does not necessarily translate into improved economic wellbeing for all. 

The findings emphasise the urgent need for targeted policy interventions, including wage parity reforms, direct financial assistance, improved urban social welfare programmes, and strengthened labour rights for identified groups.