  This work presents an empirical study of the evolution of the consumer
expenditure distribution in India during 1982-2007. We have used the National
Sample Survey Organization data and analysed the expenditure distribution for
the urban and rural sectors. It is found that this distribution is a mixture of
two distributions, more particularly, it follows a lognormal in the lower tail
and a Pareto distribution in the higher end. The Pareto tail consists of a
remarkable 30-40% of the population in the upper end and the lower end is
suitably modeled by the lognormal one. The goodness-of-fit tests endorse the
proposed distribution. Moreover, the Pareto tail is widening over time for the
rural sector. The Gini coefficient, a prominent measure for inequality, for the
expenditure distribution is found to be stable for the entire time span.

General Finance;Statistical Mechanics;Statistical Finance