Sharp rise in rural consumption in Bihar

Patna,(BiharTimes): As elsewhere in the country so in Bihar the rural consumption has witnessed a boom in recent years. 
Surge in rural wages, thanks to schemes like MNREGA and more focus on rural sector by the central government are being attributed to this rise in rural consumption. However, in Bihar, remittance, construction boom under schemes like Pradhan Mantri Gram Sadak Yojana, and enormous funding at panchayat level have also contributed to the rise in consumption.

Besides, big railways and highways projects have also provided jobs to many rural folks, which ultimately increased the consumption at the village level.

Wages of casual labour in rural areas of India rose by over 24 per cent per year between 2007-08 and 2009-10––faster than the inflation rate.

According to a study rural consumption, particularly in six rural-dominated States such as Andhra Pradesh (AP), Bihar, Kerala, Madhya Pradesh (MP), Odisha and Uttar Pradesh (UP) have seen sharp rise in rural consumption.

Though Bihar still has the lowest per capita income and lowest per person consumption expenditure, yet in recent years it has moved onto a higher growth trajectory. Its GDP growth accelerated sharply. Thus the rural per person non-food consumption expenditure in the State rose to 15 per cent per year during the period.

The rising per capita consumption together with the growing rural population raised Bihar’s share in all-India rural non-food consumption expenditure to 6.5 per cent from 6.3 per cent.

For example, penetration of bicycles rose fastest in rural Bihar. It is followed by MP, Rajasthan and Odisha. Going ahead, greater discretionary spending ability in line with the increase in income levels, improved infrastructure and growing awareness due to improved penetration of media/TV will continue to support rural consumption demand.

According to NSSO data, these developments have had a differential impact on rural consumption across States. For instance, Kerala, the highest per capita income state among the six rural-dominated States, witnessed the fastest growth in per person rural consumption (non-food) during 2004-05 to 2009-10.

The State’s high GDP growth was supported by remittance income from abroad, which continued to rise even in the aftermath of the global financial crisis in 2008-09. 

UP continued to dominate non-food consumption expenditure, which, at Rs 28,400 crore, remained the highest in India.


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