The Household Consumption Expenditure Survey reveals a shift in spending patterns among Indians, with a decrease in expenditure on essential staples like rice and wheat and an increase in discretionary items such as processed foods, along with durable goods like televisions and refrigerators.
According to the data, average rural consumer spending has surged to Rs 3,773 per month per person, up from Rs 1,430 in the 2011-2012 survey.
Urban spending also saw a substantial rise to 6,459 rupees from 2,630 rupees.
The absence of a 2017-2018 survey led to controversy, with the government citing “data quality issues.” Despite concerns that weak consumption trends were being concealed, the government denied withholding the data for such reasons. The new survey is poised to influence a review of India’s consumer price inflation index.
Key findings indicate a decline in the percentage of monthly consumption spent on food, from 53 per cent to 46 per cent in rural areas and from 43 to 39 per cent in urban regions, with a notable decrease in spending on cereals and pulses.
Conversely, there’s an uptick in expenditure on beverages, refreshments, and processed foods. Non-food items like conveyance, consumer services, and durable goods witness increased consumer spending.
The results come ahead of India’s election in May, in which Modi is seeking a rare third term.
While the Indian economy is expected to grow at a world-leading 7.3 per cent in the fiscal year that began in April and 7 per cent the next fiscal year, vast segments of the rural population confront stagnating earnings and excessive inflation.
