The latest Household Consumption Expenditure Survey (HCES) for 2023–24 has just been released, revealing how households across India are spending their money. While the figures tell a national story, Kerala’s numbers stand out.
At the national level, the Monthly Per Capita Expenditure (MPCE) of households — has reached ₹4,247 in rural areas and ₹7,078 in urban areas. This marks an increase from the previous year, with rural spending up by 9% and urban spending by 8%. The gap between rural and urban spending has narrowed to 70%, an improvement from 84% just a decade ago.
Monthly Per Capita Consumption Expenditure (MPCE) is a measure of how much, on average, a person in a household spends each month. It includes all spending on goods and services, such as food, transport, clothing, and entertainment. MPCE gives us an idea of living standards and changes in consumption habits over time.
In Kerala, the numbers are even more striking. The state’s rural MPCE stands at ₹6,673, while urban residents are spending ₹7,834 on average each month. These figures are higher than the national averages. Also, the gap between rural and urban spending in Kerala is much smaller.
Kerala's rural MPCE growth rate of 11.60% stands higher than the national rural average growth of 9.25%. Similarly, urban households in Kerala experienced a growth rate of 9.96%, surpassing the national urban average growth of 8.31%. Notably, the absolute increase in MPCE for both rural and urban households in Kerala also outshines the national figures. Rural households in the state recorded an increase of ₹687, compared to the national average of ₹349, while urban households saw a rise of ₹705, as against the national average of ₹537.
Food remains a major expenditure item for Kerala’s households, with milk, vegetables, and processed foods forming the core of daily spending. People in the state are now spending more on non-food items, such as clothing, transport, and entertainment, which signals a growing focus on lifestyle and standard of living.
On the national front, Sikkim leads the pack with the highest MPCE, but Kerala holds its ground among the top states, surpassing economic heavyweights like Tamil Nadu and Maharashtra. The data puts Kerala ahead of Tamil Nadu (₹5,872 rural; ₹8,325 urban) and Maharashtra (₹4,249 rural; ₹7,415 urban), further establishing its robust economic profile.
A key takeaway from the survey is the improvement in income inequality across the country. The Gini coefficient—a measure of income inequality—has dropped to 0.237 in rural areas and 0.284 in urban areas, reflecting more equitable growth.
National trends reveal a contrasting picture between the western and northern states of India, where consumption levels tend to be higher, and the eastern and central states, where household spending is lower. For example, rural and urban areas in West Bengal, Bihar, Assam, and several other states saw consumption spending below the national average in 2023–24.
In contrast, states like Maharashtra, Punjab, and Gujarat recorded higher-than-average per capita spending, with Kerala again standing strong in the pack.
Adding on, the survey highlights the consumption divide across income groups. The top 5% of the population, both in rural and urban areas, showed a slight decrease in their MPCE, while the bottom 5% saw a noticeable increase. This increase was most significant among the bottom 20%, both in rural and urban areas, where spending went up by 19.2% and 18%, respectively.
When looking at the consumption distribution across states, Rajasthan presented a curious case. While urban consumption there remained below the national average, the rural consumption was higher.
