CHANGING CONSUMPTION PATTERNS IN INDIA

 After  a gap of eleven years the results of all India household consumption expenditure survey conducted during August 2022 to July 2023 by the National Statistical Office (NSO)  were released by the Ministryof StatisticsandProgrammeImplementation(MoSPI).The data for the survey were collected from  261746 households from 8723 villages and 6115 urban blocks spread across the  country. As per the survey monthly Percapita Consumption Expenditure (MPCE) in Indian households rose by 33.5% between 2011-12 and 2022-23 in urban areas to ₹ 3510 as against rural areas witnessing a higher increase of  40.42% during the same period to reach ₹ 2008.The data also indicated that the urban- rural consumption divide between 2004-05 and 2022-23 narrowed significantly from the peak of 91% to 71%.The data mentioned above do not include estimated values of social welfare programs like the PM Garib Kalyan Ann yogana or state run welfare  schemes. However non food items received through welfare schemes including computers, mobile phones  bicycles etc are accounted. After adding the imputed cost of free items the average per capita consumption increased to ₹ 3860 in rural areas and ₹ 6251 in urban areas. The highest MPCE was  recorded in Sikkim state  (₹ 12105 urban and 7731 in rural) ,whereas the lowest consumption expenditure was recorded from Chattisgarg state (₹ 4483 urban and ₹ 2466 rural).Bihar, Madya Pradesh, Rajasthan and U P also reported low levels of consumption expenditure. Another feature observed was that the bottom 5% of rural population had average MPCE of ₹1373 while corresponding figure for urban population was ₹2001.Similarly the top 5% have MPCE recorded was ₹ 10501 in rural and ₹20824 urban areas respectively. In other words while t  he MPCE of top 5% rural population is 7.65 fold higher than the bottom 5% ,MPCE of the top 5% of urban households were over ten times higher than  the bottom 5%.

Another striking feature noted was the the share of expenditure on food which was 52.90% in rural households and 42.62% in urban households in 2011-12 ,  further declined to 46% (₹1750) in rural and 39% (₹2530) in urban areas in 2022-23. While the share of cereals and pulses expenditure decreased both in rural and urban households on the contrary the share of milk, fruits and vegetables recorded a spurt in consumption expenditure.Similarly data indicated that during this period there was a clear preference among Indian consumers for animal proteins and spending more on processed food items and beverages. The amount spent on fruits increased drastically along with similar trends in eggs  fish and meat etc.  As a result  online food suppliers like swiggy and zomato became very popular across the  country. In any case the consumption expenditures on non food items increased drastically from 2011-12 to 2022- 23 period to 54% in rural areas and 61% in urban areas respectively presumably due to higher spending occurred on durable goods, conveyance,consumer services etc as evident from 2022-23 data. Based on the changing pattern of consumer behaviour it is high time to revise and recast the existing consumer Price index basket.  Based on the latest MPCE data and NSO's Quarter 3 GDP estimate of 8.4% and estimated 7.6% for  the year 2023-24 year official circles gives very favourable picture of the economy and The NITI Aayog Chief B V R Subrahmanyam claimed that poverty levels have declined to mere  5 percent .NITI Aayog claim that 248.2 million Indians have come out of multidimensional poverty in the past nine years. It is observed that the estimates of poverty reduction based on the new MPCE are basically flawed, because it is estimated using old survey data.  .At the same time it is to be noted that the average MPCE of agriculture households has fallen below the overall average of rural households pointing to continuing stress in the farm sector .In nutshell changes in consumption patterns in India  indicated by recent data showed some positive outcomes.However its impact on poverty alleviation and standard of living needs to be evaluated meticulously.