Comparative Analysis of Inter-State and Intra-State Average Consumption Levels in Urban India

Abstract

In a market economy, consumers reign supreme. The market demand patterns are derived from the supply of goods and services. In this regard, the future supply of goods and services would depend, most probably on the future consumption patterns. It is not necessary to restrain consumption in order to release resources for investment; rather it is essential that the level of consumption remains on a higher side in order to produce a higher level equilibrium growth rate for the economy. This study examines the existence of variations in average consumption level between the groups of items and of inter-state variations in consumption patterns for urban sector of India. Variations in average monthly per capita consumption expenditure (MPCE) have been obtained by segregating the population into various groups. The state wise analysis of urban MPCE has been undertaken for 23 major states of India and the estimates of average MPCE are expressed as percentage of the corresponding average for general population. Variation index provides the evidence of asymmetry in consumption level of various items between states. On the basis of the variation index, the states are arranged in their ascending order for each group.