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Consumer spending falls for first time since 1973 due to low rural demand: NSO data

The NSO report claims the consumer spending in villages for FY18 dipped by 8.8, whereas, it rose by 2% in cities over six years

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Consumer spending falls for first time since 1973 due to low rural demand: NSO data
The survey was carried out by the NSO between July 2017 and June 2018

Consumer spending dropped for the first time since 1973 on weak rural demand, according to National Statistical Office (NSO), indicating towards an increase in poverty in India in recent years.

Latest consumption expenditure survey, titled 'Key Indicators: Household Consumer Expenditure in India', reveals that the average sum of money a person spends in a month dropped by 3.7% to Rs 1,446 in FY18 (2017-18) from Rs 1,501 in FY12 (2011-12). The numbers have been adjusted for inflation, taking FY10 (2009-10) as the base year.

Also Read: FMCG rural growth lowest in 7 years; poor farm income pulls down retail sales: report

"The figures for monthly per capita consumption expenditure (MPCE) are in real terms, meaning these have been adjusted for inflation, keeping 2009-10 as the base year. In 2011-12, the real MPCE had risen 13 per cent over a period of two years," says the NSO survey cited by the Business Standard.

The report claims the consumer spending in villages for FY18 dipped by 8.8, whereas, it rose by 2% in cities over six years.

Also Read: Why are markets up when the economy is down? Decoding the divergence

According to experts, the decline in the consumption expenditure suggests the growing incidence of poverty and low demand in the economy, led by the rural market.

The survey was carried out by the NSO between July 2017 and June 2018. The NSO report was approved to be released on June 19, 2019, but was withheld by the government agency owing to its "adverse" findings, sources told the news daily.

The last time the NSO exhibited a dip in consumption in real terms was in the year 1973 owing to global oil crisis.

Also Read:After WhatsApp scandal, Israel firm NSO changes its office

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