While Indians have diversified from cereals and pulses by spending more on nutritious options, that share pales in comparison to the amount spent on processed food.
The household consumption expenditure survey 2022-23 has confirmed the various changes in food consumption patterns that India has been witnessing over the past two decades. Indians have been spending more on processed food (including cooked meals purchased outside), beverages, and refreshments by reducing money spent on home-cooked food, which is prepared using cereals, pulses, and vegetables. While there are subtle variations in rural and urban areas, the pattern in general is valid across both regions.
Table 1 | The table shows the share of monthly per capita consumption expenditure (MPCE) in urban and rural areas across various periods. Figures in %.
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In urban areas, in 1999-2000, cereals formed over 12% of expenses, followed by vegetables (5%), and grams and pulses (3%). Only 6.4% was spent on processed food. As of 2022-23, cereals formed only 4.5% of expenses, followed by vegetables (3.8%), and grams and pulses (1.4%). In contrast, 10.5% was spent on processed food. The trend in rural areas was even sharper, with the share spent on cereals reducing sharply from more than 22% to 7% and the share of processed food more than doubling from 4.2% to 9.4%.
Interestingly, the amount spent on fruits has risen significantly. There has also been a considerable increase in spending on eggs, fish, and meat. So, while Indians have diversified from cereals and pulses by spending more on nutritious options such as fruits and meat, that share pales in comparison to the amount spent on processed food. Notably, the share of milk, edible oil, and spices in total expenses has remained almost the same over the years. These trends are true for rural and urban areas.
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These trends pertain only to the amount spent on food in total household expenses. It is important to note that the amount spent on food itself has been reducing over the years, which means that money is being spent on other purchases/activities. The 2022-23 data too confirm this trend. Both in rural and urban areas, the share of food in total expenses reduced and that in non-food expenses increased in 2022-23 compared with 2011-12 (Chart 2).
Chart 2 | The chart shows the food and non-food’s share in total expenses in 2022-23 and 2011-12 across rural and urban areas.
The second part of Table 1 shows trends pertaining to the amount spent on items other than food as a share of the total expenses. The amount spent on conveyance, especially work-related, shot up in 2022-23 in rural and urban areas. This is due to the incessant increase in the price of petrol and diesel in recent years. It is important to note that the ‘fuel and light’ component of the expenses has decreased because they do not include petrol and diesel used for conveyance. This component is majorly a measure of electricity, LPG and kerosene charges.
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The share spent on consumer services other than conveyance, such as house help, tailors, laundry, telecom, and the Internet has also gone up, whereas the share spent on clothing, bedding, and footwear has decreased. Notably, the share spent on durable goods such as televisions, handbags, utensils, washing machines, refrigerators, laptops, cars, scooters, and mobile phones, which had been gradually increasing, recorded sharp increases in 2022-23. The amount spent on sin goods has also increased, possibly due to higher taxes. These trends are true for rural and urban areas. However, while urban Indians continued to spend a significant amount on rent, rural Indians spent an insignificant share on that.
Chart 3 | The chart shows MPCE of urban and rural Indians in 2022-23 and 2011-12 in ₹.
The MPCE of urban Indians continued to be much higher than their rural counterparts, but the difference reduced in 2022-23 compared to 2011-12 (Chart 3).
Source: Household Consumption Expenditure Survey 2022-23 and 2011-12
rebecca.varghese@thehindu.co.in and vignesh.r@thehindu.co.in
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