A recent report by the State Bank of India (SBI) highlights a significant reduction in the poverty gap between rural and urban India in FY24, driven primarily by increased rural consumption and targeted government initiatives. The monthly per capita consumption expenditure (MPCE) gap between rural and urban areas has narrowed to 69.7% in FY24, down from 71.2% last year and 83.9% a decade ago .
The report also revealed a historic drop in rural poverty rates, which have fallen below 5% for the first time, reaching 4.86%, compared to 7.2% in the previous year and 25.7% in 2011-12 . Urban poverty rates have also shown improvement, declining to 4.09% in FY24 from 4.6% in the prior year .
Government initiatives, including direct benefit transfers (DBTs), enhanced rural infrastructure, and schemes aimed at boosting farmers’ incomes, have played a pivotal role in this progress. Additionally, a rise in rural spending has significantly contributed to poverty reduction and economic resilience in rural areas.
This convergence in consumption patterns indicates a shift towards more equitable economic growth, reflecting the success of government policies and the strength of India’s rural economy. However, the report cautions that challenges remain, especially in low-income states where inflationary pressures continue to impact consumption. Sustained efforts towards inclusive growth and sustainable development are essential to maintain this positive momentum.
