Study of Changes in Consumption Patterns of Rural Households as reflected in changes in Rural Market Economy

Changinf-consumption-patternRural India has a major share in India’s economy as around 46 per cent of India’s income and 57 per cent of aggregate spending comes from rural areas (Source- Household Survey on India’s Citizen Environment & Consumer Economy’, ICE 360° survey). The survey also highlights the share of rural India in aggregate household expenditure on essential consumption goods as 59% of total Rs. 22 trillion. The essential consumption goods include fast moving consumer goods, clothing and footwear along with food items. With increased urbanization, technological advances, rural development and poverty alleviation programs, the environment/atmosphere of rural areas is undergoing a transition in terms of emerging markets, shift from agriculture to non-farm-based economy, migration, participation of women in the socio-economic and political sphere.

 

The market areas nearing rural areas/villages such as haats or block level markets are a part of the changing market economy and we can see from experiences of visiting these areas that they are slowly catching up to the urban counterparts in terms of goods and services they provide. With the rural economy going through such transitions it is imperative to know how these changes are reflected within the households and affect the well-being of the members. For assessing the well-being of a household consumption serves as a primary indicator and may reflect actual standards of living and ability to meet basic needs of the households. According to Keynesian psychological law of consumption increased income is distributed between consumption and saving. Whatever is not consumed is saved. (J.M. Keynes (1936)). Increased disposable income is considered to be the primary factor behind changes in consumption patterns but there may be other factors such as demographic characteristics, assets of household, access to information, access to markets etc influencing the changes in the consumption patterns. The attempt is to explore and identify these factors and their relationship with the household expenditure pattern.

 

The objectives of this study are

(i)To identify and understand the factors that influence the changes in the consumption patterns in the rural households

(ii)To understand whether the aspirations and expectations of the households are being fulfilled by the current rural market economy i.e. availability of the products and services and where the gaps are present