Living in cities has become much more expensive than before. Now a large part of the average urban earnings goes to the rent of the house. According to the domestic consumption expenditure survey 2023-24, the fare share in the total consumption expenditure has increased to 6.58 percent. In all the surveys conducted after changing the millennium, this time the home fares have been increased the most. In the same survey conducted in 1999, the fare share in consumption expenditure was 4.46 percent. It was special that it increased in every round of survey after that.
In this survey, people from all over the country are consulted to understand domestic consumption and expenditure pattern. This data is used in inflation calculations. The figures presented here are based on the monthly per capita domestic consumption expenditure (MPCE) during the year 2023-24 in the country. This expenditure does not include those items, people may have got free. After calculating such things, the fare hike sits 6.5 percent.
Survey data also shows that partitions in rural and urban India are getting deeper in terms of rent. In rural areas, in 1999-2000, where the rent was 0.39 percent in the total expenditure without counting free items, now it has reached 0.56 percent in 2023-24.
There has been a decrease in expenditure on transportation in urban areas compared to last year. In the year 2023-24, it was 8.46 percent of the total expenditure in this item, while in the year it was recorded 8.59 percent. In the last 25 years, it has also increased and it was 5.52 percent of the total expenditure in 1999-2000. It is worth noting that the expenditure on transportation has increased rapidly than cities in rural areas and it has almost eliminated the difference of spending in this item. For example, where the transportation expenditure in villages was 2.94 percent 25 years ago, it has now increased to 7.59 percent. In the research done by Christian Dustman of University College London and Bernad Fitzenberger of Frederick-Elikezander University and Hambolt University in Berlin, research under the title ‘Domestic Expenditure and Inquiry’ by Marcus Jimmerman of Hambolt University, it has also emerged that if domestic expenditure increases if domestic expenditure increases So it directly affects the savings of the whole life.
In this research, increasing income equality in Germany since 1990 was closely studied. According to this, a large part of the income of people belonging to the lower class went into domestic expenses, while the rich people spent less in domestic item in proportion to their income.
This research said, ‘Today’s youth of the same age spends more in the domestic item and can save much less than what the elders spent in their home items in their youth. This will directly affect future saving and especially income distribution.
But the situation may be worse. According to an April 2024 report by the Organization for Economic Co-Operation and Development (OECD), more money is spent on home rent in OECD and more rich countries of the European Union. The report says, ‘OECD and European Union countries in 2022 were the highest expenditure on domestic consumption. In OECD countries, it was recorded on an average of 22.5 percent of the total domestic consumption expenditure and an average of 22.2 percent in European Union countries. Not only this, some countries are even more expensive in terms of spending on living. In many countries including Canada, Belgium, Denmark, Finland, Ireland, Japan and Britain, a quarter of consumption expenditure goes into home related expenses.