From beverages to processed food: How India’s spending patterns stack up

Nearly 10% of per capita expenditure was dedicated to buying beverages and processed foods in both rural and urban India. AFP PHOTO
Nearly 10% of per capita expenditure was dedicated to buying beverages and processed foods in both rural and urban India. AFP PHOTO

Summary

Food’s share in total household spending is now less than half in rural areas for the first time, official survey data showed. On average, a rural person spent 3,773 per month, compared to 6,459 per month in urban areas.

The top 5% of the urban Indian population spend 20,824 per month on their needs, nearly 10 times of what the persons in the bottom 5% spend ( 2,001), the new Household Consumption Expenditure Survey (HCES) released by the statistics ministry showed. In rural areas, the ratio is slightly narrower, at seven times ( 1,373 vs 10,501).

On average, a rural person spent 3,773 per month in 2022-23, compared to 1,430 recorded in the 2011-12 survey. An urban Indian spent 6,459 per month in 2022-23, up from 2,630 in 2011-12.

Adjusted for inflation, spending has increased by 40% in this 11-year period in rural areas, and by 33.5% in urban areas.

However, the survey’s findings are not strictly comparable due to methodology changes. The survey, conducted between August 2022 and July 2023, sheds light on the evolving landscape of household spending patterns across India.

Also read: Full report: Food now takes up less in spending bills 

The survey recorded a significant reduction in the share of food in total household spending. In rural areas, it dropped from 52.9% in 2011-12 to 46.4%, and in urban areas, it declined from 42.6% to 39.2%.

Nearly 10% of per capita expenditure was dedicated to buying beverages and processed foods in both rural and urban India. This reflected an evolving dietary preferences and lifestyle changes among Indian households. Milk and milk products were the second-biggest expense in both rural and urban India. Among non-food items, 7.6% of the entire monthly consumption expenditure in rural India and 8.6% in urban India was spent on conveyance. In rural India, medicine constituted the second-biggest non-food expenditure head, consuming 7.1% of the total household spending.

Among various social groups, the consumption expenditure was highest among urban salaried individuals, with a monthly per capita consumption expenditure of 7,146. In rural India as well, people who were earning regular wages/salaries in non-agriculture fields were spending the most ( 4,553).

A state-wise breakup of the expenditure habits among Indian households showed that Sikkim’s urban households were spending the most ( 7,731 per capita per month), followed by Chandigarh ( 7,467). Chhattisgarh with a per capita monthly spending of 4,483 in urban households and 2,466 in rural households was at the bottom of the list.

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