Monthly Expenditure Doubles, Spending on Food Down

By: Damini Mehta

The shift from cereals is commensurate with consumption of other high-value/ nutritional items such as eggs, fish and meat, and fruits and vegetables. Interestingly, the spending on high-value items has gone up more for rural households than for urban households over the last two decades.

In the 20 years between 1999-2000 and 2022, the food basket of both rural and urban households has shifted from a low to a high nutritious diet pattern. Expenditure on cereals as a percentage of total consumption expenditure of rural households has come down from 22 per cent in 1999-2000 to a mere 4.91 per cent in the most recent survey. For urban households, this drop has been more benign but also because their spending on just cereals was already low at 12 per cent and is now down to 3.64 per cent. The findings are recorded by the Household Consumption Expenditure Survey (HCES) conducted by the National Sample Survey Organisation (NSSO) under the Ministry of Statistics and Programme Implementation. The survey on household consumption expenditure generates estimates of household Monthly Per Capita Consumption Expenditure (MPCE) separately for the rural and urban sectors of the country, for States and Union Territories, and for different socio-economic groups.

The shift from cereals is commensurate with consumption of other high-value/ nutritional items such as eggs, fish and meat, and fruits and vegetables. Interestingly, the spending on high-value items has gone up more for rural households than for urban households over the last two decades. In 1999-2000, rural households spent 11.21 per cent of the total consumption spending on high value items, and urban households spent 10.68 per cent. By 2022-23, consumption on high-value/nutritional items became significantly higher for rural households at 14 per cent, and only marginal higher for urban households at 11.17 per cent.

Shifting consumption patterns in terms of food are a positive indicator for a developing society. Food items with high nutritional value essentially indicate improved earning and spending capacity and access to high-nutrition items. Low income and below poverty line households tend to spend a much larger share of their income on food items. As income increases, the share of household expenditure on food should come down which means one has more money for other items — from consumer durables to clothing and footwear, petrol or diesel for your vehicle, and even for entertainment. However, if increase in wages is not commensurate with an increase in inflation, the shift in consumption expenditure from food to other items will be lower. Expenditure surveys are often used to study poverty levels. In the 55th Round Survey (1999-2000) NSSO estimated a poverty ratio of 27.09 per cent in rural areas, 23.62 per cent in urban areas and 26.10 per cent for the country as a whole. The 2022-23 HPCE survey indicates that poverty has come down to 5 per cent in the country.

According to the NSSO’s findings, per capita monthly household expenditure more than doubled in 2022-23 as compared to 2011-12. Average per capita monthly expenditure stood at Rs 3,773 in rural areas and Rs 6,459 in urban areas in 2022-23, up from Rs 1,430 and Rs 2,630 in 2011-12 respectively. This marks a 164 per cent jump in rural average monthly consumption spending per person, much higher than a 146 per cent jump recorded for the similar figure in urban areas. The MPCE estimates are based on the data collected from 2,61,746 households (1,55,014 in rural areas and 1,06,732 in urban areas) spread over all states and Union Territories.