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Understanding the Shift in Indian Household Spending Over the Last Decade

Explore the significant changes in Indian household spending patterns over the past ten years, with a focus on increased expenditure on discretionary items and the implications for the econo

Dheeraj Kumar
22/01/2024

In the past ten years, there has been a significant transformation in the spending habits of Indian households, with a notable increase in expenditure on non-essential items, according to a recent report by the statistics ministry. This report highlights a shift from spending on basic necessities like food to more discretionary items including clothing, televisions, and entertainment options. Bloomberg's coverage of the report provides detailed insights into these changing consumer patterns.

In rural regions, the portion of monthly consumption allocated to food has decreased from 53 percent in 2011-12 to 46.4 percent in the latest survey, while spending on non-food items has risen from 47 percent to 53.6 percent. Urban areas have seen a similar trend, with food expenditure dropping to 39.2 percent from 42.6 percent, and non-food spending increasing to 60.8 percent from 57.4 percent.

The report also reveals a significant rise in average monthly per capita consumer spending, which in urban areas has grown from ₹2,630 in 2011-12 to an estimated ₹6,459 in the period between August 2022-July 2023. In rural India, spending has increased from ₹1,430 to an estimated ₹3,773 during the same timeframe.

This consumer expenditure survey is crucial for understanding the spending patterns of Indian households and assessing demand within the economy. The government utilizes this data to adjust the items considered for calculating retail inflation and gross domestic product (GDP) data.

Additionally, a report by Boston Consulting Group (BCG) and the Confederation of Indian Industry (CII) last year indicated that the prices of packaged household staples and other consumer goods have more than doubled since 2012, leading to increased financial pressure on Indian households. Despite this, spending on fast-moving consumer goods (FMCG) like biscuits, soaps, and toothpaste has surged nearly 45 percent since 2019, reaching ₹5.4 trillion in 2023.

Conclusion: The shift in spending patterns among Indian households over the last decade reflects a growing preference for discretionary items over basic necessities. This change, coupled with rising prices, presents both challenges and opportunities for businesses and policymakers. Understanding these trends is essential for tailoring products and services to meet evolving consumer needs. In this context, platforms like Probz.ai, which offers AI-powered insights collection, can play a pivotal role in gathering qualitative and quantitative data to better understand market dynamics and consumer preferences.

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Dheeraj Kumar

data specialist

Archit has been working in the field of data science since 2018. He has worked with various clients in the field of healthcare, education, and finance. He has worked with various clients in the field of healthcare, education, and finance. He has worked with various clients in the field of healthcare, education, and finance.

Member since Mar 15, 2021

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