Understanding the consumer profile of Uttar Pradesh

After the demonetization, the deposits in bank accounts have increased rapidly. The amount of deposits in Uttar Pradesh has been one of the highest in India.

Increasing per capita income of the people of UP

Uttar Pradesh is the largest state in India, in terms of population. According to the latest census data, the total population of the state is 199.8 million. The population growth rate of the state is around 2.5 % as per the latest census data which was lower than the growth rate of more than 25 % in 2001 (Census 2011, 2015).

Increasing per capita income can have huge potential for digital payment

Per capita income of Uttar Pradesh ( Source : Planning Commission)

Even though the gross domestic product of the state has been declining since 2010, there has been continuous increase in the per capita income. With increasing per capita income Uttar Pradesh has a huge potential to spend (Planning Commission, 2015).

Demographic profile of consumers in UP

majority of the population is in the working age group

Age wise distribution of population in Uttar Pradesh (Source: Census, 2011)

The age wise distribution of Uttar Pradesh shows that almost 60% of the population is in the working group of 15- 59 years. This is the age group which is able to earn and spend. The other two age groups are dependent on the working age group. So, the working group will be the one who will be making the payment for most of the transactions (Deb, 2014; Maharana & Ladusingh, 2016).

Majority of the population is married who are expected to spend more

Distribution of the population as per their marital status ( Source : Census , 2011)

According to the study of (Majumdar, 2010) the spending pattern of young Indians increase once they are married as compared to when they are single. The author also insist that the spending pattern keeps increasing till their old age.  Similarly, young people (15-35) tend to spend more on cars, two wheelers and clothing, whereas health care is the main expenditure for the people in old age (50 years and above).

Majority of the population follow Hindu religion

Distribution of the population on the basis of their religion (Source: Census, 2011)

According to RBI, only 12.2% Muslims in India have bank accounts in the public sector, whereas in the private sector only 11.3% of the Muslim have bank accounts. The low participation of Muslims in the banking sector is due to their religious restrictions (The Indian Express, 2016). Similarly the NSSO report on consumption expenditure shows that Muslims are the poorest religious groups in India. The average spending per day is Rs 32.66 for Muslims, which is lower than Rs 37.50 for Hindus.

Majority of the population is employed in agriculture

Distribution of the population in terms of their employment (NSSO, 2011)

Most of the employees in the formal sector i.e. manufacturing and services hold bank accounts and the wages are also higher as compared to the employees in the informal sector (Srija & Shirke, 2014).   However after the demonetization there has been an increase in the deposits in Jhan Dhan account holders, the informal sector is a big potential for growth digital payment industry. Also the average wage rate in the agriculture sector is increasing. With increase in income the spending will also increase as the marginal propensity to consume with respect to income is positive (Basole & Basu, 2015; Jappelli & Pistaferri, 2010).

high literacy rate in the target market helps in implementing the plan more efficienlty

literacy rate in major cities in Uttar Pradesh (Source : Census, 2011)

The high literacy rate in major cities in Uttar Pradesh is considered to be a plus point for the digital payment system in the state. People with high literacy rate are expected to have higher income as compared to those with low education level. So, as discussed previously also higher income leads to higher spending. Also the literate people are more likely to use digital payment system as compared to the illiterates (Self & Grabowski, 2004) (Akguc & Akg, 2010).

Banking penetration for digital payment 

majority of the adults in Uttar Pradesh have bank accounts

Banking inclusiveness in major cities in India  (Source; Crisil, 2015)

Access to banking facilities for adult population in Uttar Pradesh is higher than the national average (Crisil, 2015). However the proportion of people with active digital payment accounts is comparatively lower. This is due to the large population of Uttar Pradesh state. In terms of absolute population the number would be much higher than the other states.

most to the banks are in the rural areas

Total numbers of bank account in Uttar Pradesh (Source: RBI, 2014)

Number of banks in Uttar Pradesh is in the rural area. This is due to the fact that more than 70% of the population in Uttar Pradesh lives in the rural area (Census 2011, 2015). Even though the number of bank office in semi-urban and the urban are lower than that of rural, the average number of people per bank branch is much less in urban than in rural area.

Increasing financial inclusion in major cities

Financial inclusion in the major cities in Uttar Pradesh ( Source : Crisil , 2015)

The inclusive index of crisil has been prepared to measure the financial inclusion in India using 6 different banking parameters. All major cities in Uttar Pradesh show increase in their index value. This implies that these states have been performing well in terms of financial inclusion. Cities like Lucknow and Kanpur have the highest points.

Highest number of mobile and internet users 

Highest number of internet users in Uttar Pradesh

Number of internet users in India (Source; TRAI, 2015)

According to the report by (McKinsey&Company, 2012) the contribution of internet to Indian GDP is around $30 billion in 2011-2012. This is around 1.6 % of the total GDP and is expected to increase further. This shows that number of internet users is positively related to the economic growth. With economic growth the income will rise which will lead to increase in spending.

one of the highest mobile subscribers in Uttar Pradesh

Number of mobile subscribers in Uttar Pradesh ( Source : TRAI, 2015)

Uttar Pradesh has one of the highest users for both internet users and mobile phone subscribers. It would be easier to integrate them in the digital payment system (TRAI, 2015).

Spending pattern in Uttar Pradesh

Expenditure on non-food items per month in UP (Rs) Rural Urban
Books and journals 10.31 19.07
Cable Tv 1.99 14.36
Tution and other fees 25.47 109.34
Medicine 81.77 87.99
Telephone chareges: mobile 19.47 41.32
Washing soap and soda 10.71 15.82
House rent 1.28 95.23
Barber or beautician 5.92 11.04
Bus or tram fare 10.23 11.33
Petrol 16.91 72.46

(Source: NSSO, 2013)

As per the NSSO survey on household consumption an average person in rural area of Uttar Pradesh spend Rs 612 per month on food consumption whereas for non food the average monthly expenditure is 543.74. On the other hand the average monthly expenditure on food and non food consumption in urban area is Rs Rs 1083.86 and Rs 1148.83  respectively. Even though the population in the rural area is higher, the expenditure of the people in urban area is much higher.


  • Akguc, M., & Akg, M. (2010). The Effects of Different Stages of Education on Income across Countries. Toulouse.
  • Basole, A., & Basu, D. (2015). Non-Food Expenditures and Consumption Inequality in India (No. 2015–6). Boston.
  • Census 2011. (2015). Uttar Pradesh Population Census data 2011. Retrieved January 19, 2017, from http://www.census2011.co.in/census/state/uttar+pradesh.html.
  • Crisil. (2015). Crisil Inclusix. Mumbai.
  • Deb, S. (2014). Ageing and Consumer Spending: Some Preliminary Findings from India and China. In h Annual Conference on Global Economic Analysis New Challenges in Food Policy. Dakar. Retrieved from https://www.gtap.agecon.purdue.edu/resources/download/6750.pdf.
  • Jappelli, T., & Pistaferri, L. (2010). The Consumption Response to Income Changes. Annual Review of Economics, 2.
  • Maharana, B., & Ladusingh, L. (2016). Household Age Composition and Household Expenditure for Food and Healthcare in India. Social Science Spectrum, 2(2), 90–104.
  • Majumdar, R. (2010). Consumer Behaviour: Insights From Indian Market. New Delhi: Prentice Hall India Learning Private Limited.
  • McKinsey&Company. (2012). Online and upcoming: The Internet’s impact on India. Mumbai.
  • Planning Commission. (2015). Gross State Domestic Product at Constant 2004-05 Prices. New Delhi. Retrieved from http://planningcommission.nic.in/data/datatable/data_2312/DatabookDec2014 59.pdf.
  • Self, S., & Grabowski, R. (2004). Does education at all levels cause growth? India, a case study. Economics of Education Review, 23.
  • Srija, A., & Shirke, S. V. (2014). An Analysis of the Informal Labour Market in India. Retrieved from http://www.ies.gov.in/pdfs/CII EM-october-2014.pdf.
  • The Indian Express. (2016). RBI shows interest in no-interest banking. What does it mean? The Indian Express. New Delhi.
  • TRAI. (2015). Number of internet users in India. New Delhi. Retrieved from http://www.trai.gov.in/release-publication/reports/survey-reports.
Indra Giri

Indra Giri

Senior Analyst at Project Guru
He completed his Masters in Development Economics from South Asian University, New Delhi. His areas of interest includes various socio development issues like poverty, inequality and unemployment in South Asia. Apart from writing for Project Guru he loves to travel and play football in his spare time.
Indra Giri

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