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 per cent in both rural and urban areas.
5 per cent drop in cereal & pulses
The report said, 'A significant drop (more than 5 per cent) in 'Cereal & Pulses' consumption both in rural and urban areas.' The report also noted that this change of consumption shift (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 said, 'Consumption Behavior has Shifted from Food to Non-Food Items... It is interesting to see the change in consumer preference both in rural and urban areas during the last 12 years.'The report highlights a substantial drop in the share of expenditure on food items.
5.86 per cent drop in rural and 2.94 per cent in urban
In rural areas, the percentage of spending on food decreased from 52.9 per cent in 2011-12 to 47.04 per cent 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 per cent to 39.68 per cent, 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 per cent in 2011-12 to 52.96 per cent in 2023-24, registering a 5.86 percentage point rise.
Urban area witnessed growth in non-food spending
Urban areas also experienced growth in non-food spending, with the share rising from 57.38 per cent to 60.32 per cent, 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.
Socio economic change as spending shift from food to non food
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.
