Indians cut down food costs, spend more on durable goods: govt survey

Indian households have cut down expenditure on food items, including cereals, while spending more on durable goods, according to the latest consumption data released by the government this week.

The Household Consumption Expenditure Survey conducted by the National Sample Survey Office, or NSSO, showed that the average monthly per capita consumption expenditure in rural areas was ₹3,733 (about $45 today), up from ₹1,430 (about $17 today) in the last round in 2011-12.

In urban areas, monthly consumption expenditure was ₹6,459 against ₹2,630 a decade ago.

Of the total household expenditure, the share of spending on food in urban areas declined to 39.1% from 42.6%, while in rural areas, food expenditure was down from 52.9% a decade ago to 46.4%, the lowest ever.

The share of cereals has also seen a steep decline in both rural and urban areas. In urban areas, their share is down from 6.7% to 3.6%, while in rural areas it is down from 10.8% a decade ago to 4.9% now.

Retail inflation

The latest survey, which comes just ahead of the general election, will form the basis for computing the formula for Consumer Price Index (CPI)-based inflation.

The government decided to conduct two consecutive surveys during 2020-21 and 2021-22 to facilitate a decision on the choice of appropriate period for the revision of the ‘base year’ for macroeconomic indicators.

However, due to the emergence of the covid-19 pandemic, the survey of 2020-21 could not be started.

The first of the two consecutive surveys began in August 2022 and continued till July 2023, after the situation became conducive for conduct of survey fieldwork, the survey said.

Losing appetite

While spending on cereals in rural areas under the food category is down, spending on consumption of dry fruits, beverages, processed foods, and egg and non-vegetarian foods has climbed.

In non-food expenditure in rural areas, spending on conveyance has seen the steepest increase, followed by durable goods and entertainment, apart from rent.

In urban areas, too, spending on consumption of dry fruits, beverages, and processed foods are up in the food category, while expenditure on tobacco, conveyance and durable goods are up.

Among the states, the average monthly per capita consumption expenditure is the highest in Sikkim for both rural (₹7,731) and urban (₹12,105) areas, while it is the lowest in Chhattisgarh for rural (₹2,466) and urban (₹4,483) areas.

The average monthly per capita consumption expenditure among the union territories is the highest in Chandigarh rural at ₹7,467 and urban at ₹12,575, whereas, it is the lowest in Ladakh (₹4,035) and Lakshadweep (₹5,475) for rural and urban areas, respectively.