The Hindu Business Line : Spending disparity

Urban households spend around 45 per cent of their income on food while the rural ones spend 55 per cent, notes Rajesh Shukla’s How India Earns, Spends and Saves ( www.ncaer.org), a study by the Max New York Life Insurance Ltd and the National Council of Applied Economic Research. An interesting finding is about the ownership profile of consumer durables. “Just 38 per cent of rural households, for instance, own a pressure cooker/pan as compared with 80.4 per cent for urban areas.” In the medium category of durables such as TVs, geysers, vacuum cleaners and mixer-grinders, penetration levels are even lower, the study states. It should be sobering for professionals in financial services to know that investment in financial instruments like small savings, stocks and insurance add up to a mere 3 per cent of the estimated household income. “Of these, investment in stock market and small savings account for 0.5 per cent each.” For life insurance, it is 2 per cent, despite more than three-fourths of Indian households being aware of insurance. Valuable insights.

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