Household Consumption Patterns 2023-24: Key Insights on Rural and Urban Spending Trends

Source: IE

The Household Consumption Expenditure Survey 2023-24, released by the Ministry of Statistics and Programme Implementation (MoSPI), offers an intriguing glimpse into the spending habits of Indian households. The survey sheds light on the shifts in consumption patterns, revealing notable trends in rural and urban expenditures, food versus non-food spending, and state-wise disparities.

Rural vs Urban Spending Patterns

In 2023-24, rural households displayed a notable increase in spending, with average monthly consumption expenditure rising to ₹4,122 per person, a 9.3% jump from ₹3,773 in 2022-23. Urban spending also rose but at a slightly slower pace, increasing by 8.3% to ₹6,996 per person. Interestingly, the gap between rural and urban consumption narrowed further, suggesting a relative improvement in rural spending power. This may indicate either rising rural incomes or more conservative urban spending due to economic pressures.

Shifting Trends in Food Spending

Food remains a significant component of household expenditure, with its share in the total consumption basket increasing after years of decline. Rural households allocated 47.04% of their spending to food in 2023-24, compared to 46.38% in 2022-23. Similarly, urban households increased their food expenditure share from 39.17% to 39.68%. This shift could reflect rising food prices, which are pushing households to spend more on essential items.

Top Food Categories

1. Beverages and Processed Foods: The largest food category in 2023-24, rural households allocated 11.09% of their budget to this group, while urban households spent 9.84%.
2. Milk and Milk Products: Ranked second, rural spending was at 8.44%, while urban spending was 7.19%.
3. Vegetables: Claimed the third spot, with rural households spending 6.03% and urban households 4.12%.

Declining Expenditure on Sugar and Salt

A consistent decline in spending on sugar and salt was observed, continuing a trend from previous years. This could indicate changing dietary habits, possibly influenced by health concerns or greater affordability of alternative products. Conversely, beverages and processed foods showed a steady rise in expenditure, reflecting evolving consumer preferences.

Spending on Non-Food Items

Non-food expenditure dominated household budgets, accounting for 52.96% and 60.32% of total spending in rural and urban areas, respectively. Key categories included:

• Conveyance: The highest expenditure in both regions, with urban households spending 8.46% and rural households 7.59%.
• Medical Expenses: A significant category, rural spending was at 6.83%, while urban spending reached 6.92%.
• Durable Goods and Rent: Spending on these categories remained robust, particularly in urban areas, where rent claimed 6.58% of household budgets.

State-Wise Variations in Consumption

States in western, southern, and northern India outperformed the national average in per capita monthly consumption. Maharashtra, Tamil Nadu, Punjab, and Kerala recorded higher spending, reflecting stronger economic conditions. Conversely, eastern and central states such as Bihar, Odisha, and Uttar Pradesh lagged behind, highlighting regional disparities in economic development.

Conclusion

The Household Consumption Expenditure Survey 2023-24 paints a dynamic picture of changing consumer behavior in India. While rural households are increasing their spending, urban households are exhibiting signs of caution. The growing focus on beverages, processed foods, and medical needs reflects broader socioeconomic changes. Regional differences in consumption underscore the need for targeted policies to bridge the gap between states.

Practice Question:
“Analyze the factors contributing to the narrowing rural-urban expenditure gap in India as revealed by the Household Consumption Expenditure Survey 2023-24.” (250 words)