The objectives of this study are to decompose household consumer expenditure inequalities in India by regions (states) and sectors (urban-rural) for the years 1977-78 and 1983 based on the National Sample Survey data. A class of Generalised Entropy measures is used. Our results consistently indicate that the inequality within states contributes much more towards national inequality and within-sector inequality explains a large part of state level inequality. The inequality at state levels has shown a decline from 1977-78 to 1983 due to a better monsoon season in 1983, and anti-poverty programmes.