Rural Indians are now spending more on processed food, drinks than cereals

For urban India, the spending on processed food has been more than that on cereals since 2011-12 but the gap has widened in the last 10 years

For the first time, the share of beverages and processed food (including purchased cooked meals) in the total spending of rural Indian households has crossed that of cereals, according to the latest Household Consumption Expenditure Survey (HCES) released by the Ministry of Statistics and Programme Implementation (MoSPI). It highlighted that the share of cereals, cereal substitutes, vegetables and pulses has also decreased. 

In rural India, the share of cereal in total monthly per capita consumption expenditure (MPCE) has fallen to 4.89 per cent in 2022-23 as compared to 10.69 per cent in 2011-2012. The share of cereal substitutes has gone down to 0.02 per cent from 0.06 per cent during the same period.

At the same time, the spending on vegetables has reduced to 5.38 per cent from 6.62 per cent.

It must be noted that the share of most of these categories in total spending has been reducing since 2000 but it is for the first time that spending on beverages & processed food has crossed that of cereals.

The share of this category has gone up to 9.62 per cent from 7.90 per cent in 2011-12. This is despite the total food spending as a percentage of total spending in rural India falling from 52.9 per cent in 2011-12 to 46.38 per cent in 2022-23.

Some other categories, which saw higher spending percentages in rural India were dry fruits (1.17 per cent), egg, fish & meat (4.91 per cent), fruits (2.54 per cent) and milk & milk products (8.33 per cent).

The gap widens in urban India

For urban India, the spending on processed food has been more than that on cereals since 2011-12. In the last 10 years, however, the gap between the two has widened. This is despite the total share of food in total monthly expenditure falling to 39.17 per cent in 2023-23 from 42.62 per cent in 2011-12.

In 2011-12, urban Indians spent 6.61 per cent of their total monthly expenditure on cereals and 8.98 per cent on beverages & processed foods.

In 2022-23, the percentage spending on cereals has nearly halved to 3.62 per cent and that on beverages & processed food has gone up to 10.64 per cent.

The share of spending has also reduced for pulses (1.21 per cent), vegetables (3.8 per cent), fresh fruits (2.5 per cent) and egg, fish & meat (3.57 per cent).

Apart from beverages & processed food, the spending percentage has only gone up in the category of milk & milk products (7.22 per cent).  

Owing to the increase in rural consumption, interestingly, the difference in average monthly consumption expenditure between rural and urban households has fallen to 71.2 per cent in 2022-23 from 83.9 per cent in 2011-12.