Indians spending pattern: After a hiatus of almost 11 years, the Household Consumer Expenditure Survey’s key findings were released on Saturday by the Ministry of Statistics and Programme Implementation (MoSPI). 

The survey showed how much and what Indians are spending on, and how consumption patterns have gone through a massive transformation in the last 11 years.

How India eats, and how Indians are spending on non-food items are some of the key takeaways of the survey. In addition, the survey also highlighted that the bottom 5 per cent of Indians are spending Rs 46 per day in rural India and Rs 67 per day in urban India. This  estimate of spending by the bottom 5 per cent of people is well above the Tendulkar Committee's estimate of 2009 and the Rangarajan Committee's estimate of 2012. 

As far as spending on food is concerned, of 13 items under the food category, 9 items witnessed a decline as a share in total monthly per capita consumption expenditure (MPCE)  in the last 11 years, and 4 items witnessed an uptick in the mentioned period. 

Cereal Consumption Down in India

The survey’s fact sheet reveals that the share of cereals in average monthly per capita consumption expenditure (MPCE) has been declining over the decade. The survey highlighted that the share of cereals in average MPCE was at 22.23 per cent in 1999-2000, which steeply declined to 10.75 per cent in 2011-2012, and finally to 4.91 per cent in 2022-2023. 

This means the consumption of cereals as a percentage share of total consumption has gone down substantially.

Simply put, if someone is spending Rs 100 in a month in rural India, then the spending on cereals has come down to Rs 4.91 in 2022-2023, from Rs 22.23 in 1999-2000. On the other hand, in urban India, the share of cereals consumption in MPCE stood at 3.62 per cent, which is down from 6.61 per cent in 2011-2022, which means in cities if someone is spending Rs 100 in a month then spending on cereals stands at 6.61 per cent. 

Indian Spending More on Beverages and Processed Food

Another big takeaway is the way Indians are inclined more towards buying beverages, processed food which includes purchased cooked meals has also gone up substantially across rural and urban India. 

The share of beverages, and processed food has gone up from 6.35 per cent in 1999-2000 to 8.98 per cent in 2011-2012, and finally reached to 10.64 per cent in 2022-2023 in urban India.  

In rural India, the consumption of beverages and processed food as a share of total MPCE has gone up from 4.19 per cent in 1999-2000 to 7.90 in 2011-2012, and finally is up at 9.62 per cent.

This simply means that in the last 11 years, the consumption of beverages and processed food has risen majorly in rural and urban India. Under the food category, this is the only category that witnessed the maximum growth in consumption against 2011-2012 survey findings.  Simply, people across rural and urban India are spending more on processed food, beverages, etc. 

Embracing Balanced Diet

As the consumption of cereals, vegetables, pulses, and pulses products, sugar and salt, edible oil, and spices have gone down. On the other hand, the consumption of fresh fruits, dry fruits, eggs, fish, and meat has gone up when compared with 2011-2012 levels.

The share of egg, fish, and meat as a percentage share of total MPCE stood at 3.13 per cent in 1999-2000, which rose to 3.65 per cent in 2011-2012, and finally to 3.57 per cent in 2022-2023. In Rural India, the consumption of egg, fish, and meat as a share in total MPCE has gone up from 3.32 per cent in 1999-2000 to 4.79 per cent in 2011-2012 and finally to 4.91 per cent in 2022-2023.  This also means that rural India is spending more on eggs, fish, and meat. 

Similarly, the consumption of fresh fruits and dry fruits has gone up both in rural and urban India. The story is the same for milk and milk products. The consumption pattern shows how Indians are spending less on cereals, pulses, oil, spices, and oil, but are spending more on items that constitute a balanced diet. 

Total Food Spending

The share of food as total MPCE was at 59.40 in 1999-2000, which dipped to 52.90 in 2011-2012, and finally to 46.38 per cent in 2022-2023 in rural India. On the urban front, the share of food as total MPCE has gone down from 48.06 per cent in 1999-2000 to 39.17 in 2022-2023. In a nutshell, the rural India is still spending more on food in comparison to urban India.

This is also good news because spending more on food leaves less money to spend on other things. If less money is being spent on food, then an individual has financial headroom to spend on more items like clothing, footwear, fuel, and other items, which improves the lifestyle of an individual. Spending less on food is good news as this highlights the shifting consumption pattern, where the spending is more towards improving the living standard. 

“It’s not that consumption levels of food are going down in absolute terms, but the relative spending on food is declining while consumption of products like TVs, fridges, mobile phones, and cars have increased. This not only means there is a change in incomes for the better, but also a change in lifestyles,” BVR Subramanyam, CEO of the NITI Aayog said.  

If not food then what?

If the spending on food in both rural and urban India has gone down, then on what items India is spending more. The spending on conveyance, consumer services, and durable goods has increased comprehensively. The share of spending on conveyance has gone up from 2.94 per cent in 1999-2000 to 4.20 in 2011-2012, and finally to 7.55 per cent in 2022-2023 in rural India. The spending on conveyance stood at 8.59 per cent in 2022-2023. 

In consumption services, the spending on consumer services in rural India has increased from 2.98 per cent in 1999-2000 to 5.08 per cent in 2022-2023.

The spending on consumer durables in rural India has risen from 2.62 per cent in 1999-2000 to 6.89 per cent in 2022-2023. Meanwhile, in urban India, the spending on durable goods has risen from 3.61 per cent in 1999-2000 to 7.17 per cent in 2022-2023. This means that people are spending less on food relatively and spending more on buying durable goods like fridges, TVs, etc.  

“Lower spending on pulses and cereals as a share of per capita consumer expenditure as per the latest survey and higher expenditures on conveyances, consumer durables, and consumer services indicates that people are earning more and need to spend a lesser share of their income on food,” said BVR Subrahmanyam, CEO of the NITI Aayog.