Examination of consumer price index in India – rural versus urban

Abstract

For the last 66 years Indian economy has gone through many phases. The development of both rural and urban India has taken place indeed but the debate of rural versus urban or in other words India versus Bharat is still very relevant and contemporary. The Consumer Price Index (CPI) is an important economic indicator. In this paper, the authors have examined the CPI of India from January, 2011 to April, 2014 (40 months) to identify whether both rural and urban India exhibit the same economic pattern or not. The authors have observed that the distribution of CPI is different in rural and urban India in ‗recreation and amusement‘, ‗transport and communication‘ and ‗household requisites‘. It is well known that dual economy is an important theory in economics. The findings of this paper certainly spark the question in our minds – ―Are we living in a dual economy in India‖.