Consumption patterns— how much of what people are buying—are important indicators of the quality of life and the way it’s changing. The Household Consumption Expenditure Survey (HCES) for 2023-24 threw up a few questions when it showed that conveyance claimed the largest share of family budgets among non-food items. An average rural household’s expense on this count was 7.6 percent of the total, and an urban one’s was 8.5 percent. Other high spends in rural areas were on durables (6.5 percent), fuel and light (6.1 percent) and clothing (5.6 percent). In urban India, goods and entertainment (6.9 percent), durable goods (6.8 percent) and rent (6.6 percent) dominated after conveyance. The high spends on conveyance indicate greater mobility, as people are traversing longer distances for work and leisure. On the flip side, it also reflects high fuel prices and poor public transport.
The good news is that the share of food in rural household budgets has dropped below 50 percent for the first time. In other words, while household income largely went towards feeding the family earlier—with little left for other necessities like health, education and clothing—the scenario has been slowly shifting as higher incomes allow more balanced spending. The latest survey shows the average monthly per capita expenditure on food was 47 percent in rural areas and 40 percent in urban ones. It’s a sharp change from the 60 percent that rural households spent on food in 1999-2000.
The consumption survey also shows that the yawning gap in the monthly per capita expenditure between rural and urban households has been narrowing. It fell to 71 percent in 2022-23 from 84 percent in 2011-12, and edged down to 70 percent in 2023-24. But this progress is too slow on a base too low. The 2023-24 survey shows that the average monthly budgets in rural and urban households were ₹4,122 and ₹6,996. These are too small for buying anything beyond the basic necessities. A 70 percent gap between rural and urban households is too large a gap to be acceptable. No doubt there has been progress, with millions of Indians rising above abject poverty. Yet, crossing the line from necessity to sufficiency is still a long shot.