Ranking India’s states on consumption

NSSO surveys paint a rather different picture from the conventional narrative of growth in the states

Which state has the highest consumption per capita? Consumption is, after all, one of the chief measures of well-being. And which states have shown the highest increase in per capita consumption? The accompanying charts tell the story for selected major states. The data have been taken from the National Sample Survey Office’s (NSSO’s) Household Consumer Expenditure Surveys for 2003 and 2011-12.

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The chart shows that, in 2011-12, rural Kerala had the highest per capita consumption per month among rural areas. At Rs.2,668 per month, it was far above the All-India rural average of Rs.1,430 and well above that of Punjab, which was the next highest. There are no surprises among the laggards—these include the usual suspects Odisha, Jharkhand and Bihar.

More interesting, though, is the change from 2003. In that year, too, the numero uno in rural consumption was Kerala, followed by Punjab. Rural Haryana, at No. 3, was at the same rank in both 2003 and 2011-12. But rural Gujarat, which was the fourth from the top in consumption in 2003, slipped to a lowly No. 9 among the selected states. On the other hand, rural Andhra Pradesh, which was at No. 6 in 2003, improved its rank to No. 4 in 2011-12. Both rural Rajasthan and rural Karnataka also saw good growth in consumption.

What about urban India? The 2011-12 survey showed that urban Haryana topped the charts, no doubt aided by the growth of Gurgaon and other areas near Delhi. Among the selected states, urban Haryana improved its rank from No. 4 in 2003 to No. 1 in 2011-12. Urban Kerala, the top consumption rank holder in 2003, was pushed to second place. Maharashtra retained its No. 3 position. Urban Punjab however, slipped in the rankings. Urban consumption in Gujarat in 2011-12 slipped below the all-India average. Indeed, average urban consumption in Gujarat fell below that of West Bengal.

To be sure, the consumption figures also include the effect of local inflation and consumption patterns, but we have excluded the north-eastern states and the hill states for that reason. The results for Uttar Pradesh and Madhya Pradesh need to be adjusted for the fact that their 2003 figures included Uttarakhand and Chhattisgarh, respectively.

The results show tepid improvement in consumption in Assam and Jharkhand. Bihar, on the other hand and in keeping with other data, shows a lot of improvement. Among the richer states, Punjab has slipped badly. Consumption growth in Gujarat has been nothing to write home about. Consumption growth in Karnataka has been high. Rajasthan, too, has done well. And, perhaps, Kerala’s high consumption rank owes a lot to remittances.

So, is there an Andhra or Tamil Nadu model of rural growth then? Or a Karnataka or Haryana model of urban growth? What’s interesting is that the NSSO surveys paint a rather different picture from the conventional narrative of growth in the states.