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Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 03 Issue 10
September 2017
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 358
Household Consumption Pattern and its Impact onInequality in India: A
Post-Globalization Scenario
DR.MANDA SURESH
Dept.of Political Science- Osmania University,Hyderabad,Telangana,India
Abstract—The paper intends to analysis household consumption pattern and its impacton inequality in rural
and urban sectors after reform period (1993–94 to 2011–12). Thisstudy is mainly based on secondary data from
different National Sample Survey Office(NSSO) round (50th, 55th, 61th, 66th, 68th) of ‘Level and Pattern of
Consumer Expenditure’and time period has been taken since 1993–94 to 2011–12. The NSSO provides
clearevidence of the downwards trends in share of food expenditure and increase the share ofnon–food
expenditure in total consumption expenditure during this time period. The mainfinding of paper is ‘Cereals and
cereals substitute’ consumption expenditure has declinedaround from 24 per cent to 12 per cent in rural sector
and 12 per cent to 7.5 per cent inurban sector since 1993–94 to 2011–12. The combined share of pulses, milk,
meat,vegetables and fruit etc. has declined about 27.7 per cent to 26 per cent and 29 per cent to21 per cent in
rural and urban respectively. The coarse cereals consumption (kg) hasdeclined about 71 per cent in rural sector
and 64 per cent in urban sector over the sameperiod. The inequality has increased in most of states in rural and
urban areas. The shareof consumption expenditure bottom 30 per cent has declined and top 30 per cent
peoplehas increased in rural and urban sectors. The Gini Coefficient has increased 0.280 to 0.302and 0.340 to
0.379 in rural and urban sectors respectively since 1993–94 to 2011–12.The situation in urban sector has
worsened rather than rural areas over the 18 years.
Keywords: Consumption Pattern, Food Expenditure, Non-food Expenditure,Inequality, Gini Coefficient
INTRODUCTION
Indian economy is one of the fastest growing economies in the world at recent years.The growth rate
of GDP grew annual by 8.5 per cent since 2004–05 to 2010 as wellas annual per capita GDP also
increased at 6.5 per cent during the same period(Rangarajan Expert Group Report, 2014). But share of
food expenditure in totalconsumption expenditure has declined as well as calorie intake also decline
duringpost-reform period. It makes puzzle among researchers and policy makers tounderstand as to
why calorie intake has declined when monthly per capitaconsumption expenditure has increased in
real term. Although, NSSO data showsabsolute per capita food expenditure has increased since 1987–
88 despite lowergrowth rate poverty was decreased in nineties. Yet, per head calorie intake
isdecreasing and three quarters of country’s population lives below 2,400 Kcal perday per person in
rural area and 2,100 Kcal per day per person in urban area
(Patnaik, 2013). The main reason of decline calorie intake is that per capita cerealsconsumption
continuously decreases in both rural and urban areas.
India is third largest economy in the purchasing power parity (PPP) at the worldlevel (Varadharajan
and Thomas, 2013). However, the share of food consumptionexpenditure in total consumption
expenditure is declining continuously whereas theshare of non- food expenditure is increasing (NSSO
68th Rounds). This observationfits in Engel’s law that shows the expenditure on food items decreased
due topeople’s disposable income increased. National sample survey office (NSSO)provides a clear
evidence of the downward trend in share of food in totalconsumption (Economic Survey, 2012), but
India became self-reliance in food-grainproduction after green revolution therefore, availability of
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Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 03 Issue 10
September 2017
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 359
cereals like wheat, ricehas increased. The objective of study to analyze to change in food basket
afterreform period and another objective is to measure consumption inequality withhelp of Gini
Coefficient.
The Organization for Economic Co-operation and Development’s (OECD)report-2011 pointed out
that inequalities have risen after 1990s when the Indianeconomy opened its doors to global
economies. According to the report, inequalitiesin salaries earning have risen by two fold over the last
two decades. The richer aregetting richer and the poorer are getting poorer. The top 10 per cent of
wageearners make 12 times more than the bottom 10 per cent, compared to six timesfrom the 1990s.
Thus, the growth of nineties could not reduce poverty andinequality. Indian policymakers have always
tried to reduce poverty and inequality.After independence, India adopted a development strategy
which could reduceinequality and poverty in society. In the early 1990s, the Indian
governmentadopted market-oriented economic reform policies and gave emphasis onliberalization,
privatization and globalization. The National Sample SurveyOrganization data (NSSO 68th Round)
shows clear evidence that after liberalization;consumption inequality has increased in both rural and
urban sectors. The IndianHuman Development Report (IHDI 2001) shows that the Gini coefficient’s
valueincreased from 1983 to 1999–2000. The Planning Commission has also acceptedthat the income
inequities has increased since 2004–05; it is that period when theIndian economy has achieved second
position in rapid GDP growth in the worldafter China, According to the Planning Commission data
book, the Gini coefficientincreased from 0.27 to 0.28 in rural area from 2004–05 to 2009–10 and in
urbanarea, it increased from 0.35 to 0.39.
FOOD GRAINS AVAILABILITY
Agriculture sector was dominant sector and its share in GDP was 57.2 per cent in1950–51 but after
that its share continuously decline and reached 13.9 per cent in2012–13 (Mishra and Puri, 2014).
India imports food grains from other countries tofeed its people just after independence but early 70’s
it apply new policy foragriculture. This strategy was known as green revolution which was
commonlycharacterized as High- Yielding Varieties Programme (HYVP), and after thatproduction
and productivity had increased multiple times. On account of Indiabecame self-reliance in food grains
production.
Household Consumption Pattern and its Impact on Inequality in India: A Post-Globalization Scenario
Singh 61
Table 1.1: Per Person Per Day Availability of Food grains (1970 to 2012)
Year Cereals
(Grams)
Pulses
(Grams)
Total
(Grams)
Edible Oil (Grams) Vanaspati (Grams) Sugar (Grams)
1 2 3 4 5 6 7
1970 403.1 51.9 455 3.5 1 7.4
1980 379.5 30.9 410.4 3.8 1.2 7.3
1990 435.3 41.1 476.4 5.5 1 12.7
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ISSN: 2395-0463
Volume 03 Issue 10
September 2017
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 360
2000 422.7 31.8 454.4 8.2 1.3 15.8
2010 401.7 35.4 437.1 13.1 1.1 18.6
2011 410.6 43 453.6 13 1 17
2012 408.6 41.7 450.3 13.8 1 18.7
Source: Economic Survey 2011–12.
Although, Per capita food availability has increased (Table 1.1) but the share offood expenditure
decreased in total consumption along time as well as nutritionalintake also declined specially during
the post reform period. The important foodbasket like cereals, pulses, edible oil sugar and it’s per
person per day availabilityhas shown since 1970 to 2012. The total per capita per day cereals
availability isabout 403 grams in 1970 and it has reached 408 grams in 2012. The Table 1.1 alsoshows
per person per day pulses availability has declined from 1970 to 2012. Theimportant point to mention
is that per capita total cereals (cereals and pulses) havedeclined from 455 grams to 450 grams and
edible oil has continuously increased 3.5to 13.8 grams per day per person. The same observations can
be seen that per capitasugar availability has increased from 7 grams to 18.7 grams during the same
period.
CONSUMPTION EXPENDITURE: PRE-AND POST-REFORM PERIOD
Consumption expenditure data has been taken from different quinquennial surveys ofNSSO since
1972–73 to 2011–12. ( 27th round, 32nd round, 38th round, 43rd round, 50thround, 55th round, 61st round,
66th round, and 68th round and that’s time period is1972–73, 1977–78, 1983, 1987–88, 1993–94,
1999–2000, 2004–05, 2009–10 and2011–12 respectively. Consumption expenditure pattern of
household in pre and postreform period has been shown in Table 1.2. The Following table reflects the
foodconsumption expenditure decline at slow rate during pre-reform period but afterreforms
consumption expenditure has drastically changed and the share of non-foodexpenditure has increased
more rapidly in total private consumption expenditure.
Table 1.2: Share of Consumption Expenditure on Food and Non Food Items:
Pre and Post Reform Period (1972–73 to 2011–12)
Sr. No. Pre Reform Period Post Reform Period
Item 1972–73 1977–78 1983 1987–88 1993–94 1999–2000 2004–05 2009–10 2011–12
Food
expenditure
68.7 62.15 62.35 60.2 58.95 53.75 48.75 47.15 43.55
Non-food
expenditure
31.3 37.85 37.65 39.8 41.05 46.25 51.25 52.85 56.45
Totalexpenditure
100 100 100 100 100 100 100 100 100
Source: NSSO 43rd round 1993–94 and NSSO 68th Round.
In pre reform period, food consumption expenditure share has declined around68 to 60 per cent in
total consumption expenditure from 1972–73 to 1987–88whereas share of non-food expenditure has
