Rural non-food spend over 50% for first time: Consumer expenditure survey

Spending share increased on intoxicants, toilet articles, entertainment

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The average spending on non-food items by rural India surpassed the 50 per cent mark for the first time in 2022-23, with a decrease in the proportion of total expenditure now allocated to food items, according to the latest Household Consumption Expenditure Survey (HCES) released by the Ministry of Statistics and Programme Implementation (MoSPI).

The Survey results released after 11 years show as a share of monthly per capita expenditure (MPCE), spending on food items in rural India decreased to 46.38 per cent in 2022-23 from 52.9 per cent in 2011-12.

The latest data is expected to play a pivotal role in reviewing critical economic indicators such as the consumer price index (CPI), the gross domestic product (GDP), and poverty levels.

In urban India, this proportion declined further to 39.17 per cent in 2022-23 from 42.62 per cent in 2011-12.

In contrast, the spending on non-food items as a percentage of MPCE increased to 53.62 per cent in 2022-23 from 47.1 per cent in 2011-12.

In urban India, this proportion further increased to 60.83 per cent from 57.38 per cent during the same period.

In rural India, spending on cereals dipped to 4.89 per cent of MPCE in 2022-23 from 10.69 per cent in 2011-12, due to the free food grain supplies by the central government through Garib Kalyan Anna Yojana.

Among other items, spending on vegetables, pulses, edible oils, sugar, and salt also declined while spending on milk and milk products; egg, fish, and meat; fresh fruits; beverages, and processed food increased.

Among non-food items, spending share increased on paan, tobacco, and intoxicants; toilet articles and household consumables; medical, entertainment, rent, conveyance, and consumer services except conveyance and durable goods while the share of expenditure declined on items such as fuel and light; education, clothing and bedding and footwear, among others.

In urban India, spending on cereals, pulses, sugar and salt; egg, fish and meat, and edible oil declined while expenditure on milk and milk products, dry fruits, beverages, and processed foods increased.

Among non-food items, the spending share on paan, tobacco, and intoxicants; toilet articles and other household consumables; medical (non-hospitalisation), conveyance, rent, and durable goods increased while the share of expenditure on fuel and light; education, medical (hospitalisation), entertainment, clothing, and bedding; and footwear declined.

The data shows, at current prices, MPCE in rural areas increased to Rs 3,773 per month in 2022-23 from Rs 1,430 per person in 2011-12, a jump of 164 per cent, whereas in the urban areas, MPCE rose by 146 per cent to Rs 6,459 from Rs 2,630 during the same period. 

Owing to the faster pace of increase in rural consumption, the difference in average monthly consumption expenditure between rural and urban households has narrowed to 71.2 per cent in 2022-23 compared with 83.9 per cent in 2011-12.  

PC Mohanan, the former acting chairman, the National Statistical Commission (NSC), says the faster rise observed in rural consumption can be attributed to the improved methodology of the current survey, which helps in the better capture of consumption data, as the field enumerators now collect data at three different time intervals, as opposed to the earlier practice of recording everything at once.

“The characteristic of consumption in rural areas has also changed due to the rapid urbanisation in the country. Data shows the share of spend on food has come down. This could be a result of free food grains being made available at subsidised costs, while the share of spending on durables like mobiles, fridges, tablets, and consumer services has increased,” he added. 

In November 2019, the government scrapped the 2017-18 survey citing data quality issues after leaked results had shown a decline in rural consumption in real terms.