Snapshots of a crucial shift

According to the Household Consumption Expenditure Survey (HCES) by the Statistics Department of the Central Government, there has been a radical change in people's spending tendencies, lifestyles, food preferences, etc., in the last 11 years, and this process of change is continuing. The launch of new products, innovation in products, available opportunities, etc., are forcing people to adapt to the changed backdrop.

In this case, the National Sample Survey Organisation (NSSO) conducted a household consumption expenditure survey from August 2022 to July 2023, the results of which indicate a major change in the lifestyle of the people. Therefore, the government needs to make policy changes to cope with the situation and deal with the new challenges. Besides, businessmen also need to change their business patterns to maximise benefits.

This survey is conducted once every 5 years, but due to errors occurring in the survey for the year 2017-18, the survey report could not be released at intervals of 5 years. Now, after 11 years, the average Monthly Per Capita Expenditure (MPCE) survey results have been released for the year 2022-23.

In the last 11 years, the MPCE in rural areas was Rs 1,430, which increased to Rs 3,773 in the year 2022-23, while during the year 2011-12, the MPCE in urban areas was Rs 2,630, which increased to Rs 6,459 in the year 2022-23. The data shows that in rural areas, there has been an increase of monthly expenditure two and a half times in 11 years, while in urban areas also the MPCE has increased by almost two and a half times.

When considering state-wise rural and urban MPCE, Sikkim is at the top in the country. The MPCE in rural areas here is Rs 7,731, while in urban areas it is Rs 12,105. In Tamil Nadu, the MPCE in rural areas is Rs 5,310 and in urban areas it is Rs 7,630, whereas in Karnataka, the MPCE in rural areas is Rs 4,397 and in urban areas it is Rs 7,666.

Gujarat's MPCE in the rural area is Rs 3,798, and in the urban area, it is Rs 6,621. Rajasthan's MPCE in the rural area is Rs 4,263, and in the urban area, it is Rs 5,913. Madhya Pradesh's MPCE is Rs 3,113 in the rural area and Rs 4,987 in the urban area. West Bengal’s MPCE in the rural area is Rs 3,239, and in the urban area, it is Rs 5,267, while the MPCE in the rural area of Chhattisgarh is Rs 2,466, and in the urban area, the MPCE is Rs 4,483.

HCES also shows that in rural areas, there has been an increase in per month expenditure on transport, durable goods, dry fruits, fruits, processed foods, entertainment, pan, tobacco, intoxicants, toilet-related items, etc. Whereas in urban areas, there has been an increase in monthly expenditure on transport, durable goods, dry fruits, processed foods, pan, tobacco, intoxicants, etc.

Analysis of data also shows that since the year 2011-12, the expenditure on food items has been decreasing, and people have started spending more on other things. For example, in the year 2011-12, in rural areas, 53 per cent was being spent on food items, while 47 per cent was being spent on other items. This picture changed completely in the year 2022-23, and expenditure on food items declined to 46 per cent, while expenditure on other articles increased to 54 per cent. At the same time, in the urban areas of the country, during the year 2011-12, 43 per cent was being spent on food items, while 57 per cent was being spent on other things. In the year 2022-23, 39 per cent was being spent on food items in the urban areas of the country, while 61 per cent was spent on other objects.

The analysis also shows that in rural areas, there has been a decline in expenditure on grains, pulses, spices, vegetables, oil, and education, while in cities, there has been a decline in expenditure on grains, pulses, vegetables, oil, entertainment, and education. Additionally, this survey also shows that due to a decline in expenditure on food items and an increase in expenditure on other things, the government machinery has to prepare a new series of Consumer Price Index (CPI). This will also help in calculating inflation in an easier way.

As the pace of development is increasing in the country, the difference in expenditure between rural and urban India is also decreasing. Besides, there is a difference in the monthly expenditure patterns of people. In the last 11 years, MPCE has increased by two and a half times. Now people have started spending more on luxury items instead of food items. Like urban people, now people in villages have also started eating processed foods like Maggi, pasta, frozen chicken, mutton, etc.

However, a major reason for this change is also the introduction of e-commerce companies. Now, even in villages, people can get anything delivered at home through e-commerce companies. The lifestyle of village people is also changing with the help of TV and cinema. Both things are easily available in villages today, and villagers are not averse to spending on them.

A major reason is migration to cities in search of employment. Now, whether in cities or villages, people are living alone in both places. People do not have enough time to prepare roti, rice, pulses, or vegetables, etc., for breakfast, lunch, or dinner. Therefore, people are filling their stomachs with frozen or processed foods. However, the changed environment also has disadvantages. For example, surveys have revealed that people in both rural and urban areas have started spending more on tobacco and other intoxicating substances. This is a matter of concern because it is not bringing the expected pace of economic activity, and the expenditure on health is increasing.

According to HCES, the expenditure on education is also decreasing, which needs to be changed because such a trend can slow down the development of the country. Due to a decrease in expenditure on vegetables and an increase in consumption of junk food, expenditure on health items is increasing. This is also blocking the path of development because only healthy persons can discharge their responsibilities in a better way.

HCES is important data for policymaking because it shows what people are consuming and how much they are consuming. This also shows how much demand there is for which food product and how much demand it may have in the future. For example, if the demand for milk, fish, poultry products, fruits, etc., is more than that of grains, then according to the changed situation, the government should change its policy, and businessmen should change their business patterns too.

Views expressed are personal