NEW DELHI: Indian households have significantly altered their spending patterns over the past 12 years, shifting focus from food to non-food items, according to an analysis by the State Bank of India (SBI).
A deeper analysis of the report also revealed several key trends. Consumption of cereals and pulses has significantly declined, dropping by over 5 percent in both rural and urban areas.
The report stated, "A significant drop (more than 5 percent) in 'Cereal & Pulses' consumption in both rural and urban areas."
The report also noted that this shift in consumption from food to non-food items observed in both rural and urban areas reflects evolving preferences driven by economic growth, government policies, and lifestyle changes.
It added, "Consumption behavior has shifted from food to non-food items... It is interesting to observe the change in consumer preferences in both rural and urban areas over the last 12 years."
The report highlights a substantial drop in the share of expenditure on food items. In rural areas, the percentage of spending on food decreased from 52.9 percent in 2011-12 to 47.04 percent in 2023-24, marking a decline of 5.86 percentage points. Urban areas witnessed a smaller but significant reduction, with the share falling from 42.62 percent to 39.68 percent, a drop of 2.94 percentage points.
Conversely, non-food items have gained prominence in household budgets. The share of non-food expenditure in rural areas increased from 47.1 percent in 2011-12 to 52.96 percent in 2023-24, registering a 5.86 percentage point rise.
Urban areas also experienced growth in non-food spending, with the share rising from 57.38 percent to 60.32 percent, an increase of 2.94 percentage points.
On the other hand, spending on toiletries has increased, driven by the success of the Swachh Bharat Abhiyan and growing awareness about hygiene.
Interestingly, the share of taxes and cess in household expenditure has decreased, potentially due to the rationalization of GST rates. Meanwhile, spending on clothing and footwear has also declined, a trend attributed to reduced GST rates compared to the earlier taxation system.
The shift from food to non-food spending highlights India's changing socio-economic landscape. Rising incomes, improved living standards, and government initiatives promoting hygiene and affordable taxation have reshaped consumer priorities, particularly in rural areas.
This transformation highlights the dynamic nature of India's consumption behavior and its alignment with global trends.