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Metro cities get stingy, emerging cities splurge

The dynamics of purchasing power of an average Indian are changing fast with big metros, like Delhi and Mumbai, losing out to smaller cities like Gurgaon, Pune and Kochi. Chetan Chauhan reports. Mixed bag: spending habits

delhi Updated: Jul 07, 2013 02:28 IST
Chetan Chauhan
Chetan Chauhan
Hindustan Times

The dynamics of purchasing power of an average Indian are changing fast with big metros losing out to smaller cities.

The latest data on per capita consumption in the last few years shows that upcoming towns like Gurgaon, Pune and Kochi have thumped Delhi and Mumbai on the consumption pattern.

In 2012, the per capita spending in urban Haryana was Rs. 3,817 per month as compared to Rs. 3,298 in Delhi. Likewise, in Kerala is better than Delhi at Rs. 3,408. The per capita expenditure of these two states is slightly more than that of Mumbai.

The National Sample Survey Office (NSSO) measures monthly expenditure on per capita food and non-food items such as intoxicants, clothing and education.

The 2011-12 survey took into account a person’s expenditure on as many as 2,000 items, including air fare, internet and mobile phones.

But, the survey did not include a person’s expenditure on buying a car, home, holidaying or repayment of loan. Even though the survey covers over one lakh households across India, many experts point out sample size limitation as an issue of concern.

In 2004-05, among the states, the per capita expenditure in urban areas was highest for Delhi, followed by Kerala and Maharashtra. Haryana was at the fifth position with monthly per capita expenditure being Rs. 1,050.

The next few years of economic boom and the UPA government’s focus shifting from main cities to new urban centres and the rural India resulted in income levels increasing outside the main cities. It showed its impact on the people’s spending habits in upcoming towns and cities.

By 2006-07, Delhi lost its top slot and urban centres in Kerala had earned the position of having the highest per capita expenditure in urban areas.

But the new threat was emerging from upcoming towns in Haryana and Maharashtra, where spending power was increasing at a fast pace.

In 2011- 2012, the average spending of an urbanite in Haryana increased threefold to Rs. 3,817, thus earning the distinction of having the highest per capita expenditure for any state in the country.

“Most of the neo-rich now live in towns like Gurgaon, Faridabad and Panckhula as traditional cities like Delhi and Chandigarh don’t have space to accommodate people who have money,” said an official of national statistical commission.

And if the present trend continues, the per capita expenditure in urban areas in Delhi would be less than Himachal Pradesh, where spending has witnessed almost a fourfold increase between 2004 and 2011.

The 2012 survey also said that for average urban Indian, 42.6% of the value of household consumption was accounted for by food, including 9% by beverages and processed food, 7% by milk and its products, and less than 7% by cereals.

Education accounted for nearly 7%, while fuel, clothing (including footwear) and conveyance each accounted for about 6½%.

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