The Ministry of Statistics and Program Implementation (MoSPI) released the “Household Consumption Expenditure Survey” recently. The factsheet has many interesting insights into household consumption patterns in India. 

Information in the survey was collected from 8,723 villages and 6,115 urban blocks spread over the entire country covering 2,61,746 households, as per MoSPI. (India has over 6.5 lac villages per records)

The last such survey was conducted in 2011-12. So now the latest figures are coming after more than a decade. 

Another major change was that – CAPI (Computer Assisted Personal Interview) method was used for the first time to carry out this survey. The traditional method was PAPI (Pen-and-paper Personal Interview)

No of items covered during the survey also went up from 347 to 405 during the survey. 

Average MPCE (monthly per capita consumption expenditure)

The highlight of this survey is average monthly per capita consumption expenditure (also known as MPCE), as shown in the table below:

The table above clearly shows that Indians are spending more on non-food items than food items. This is especially true in the urban areas. Although the food share of consumption had risen during the 2010s, it has now drastically reduced. This indicates better financial conditions for the households over the last decade.

Let us see the graph below:

Some important pointers:

1. Top 5% of the population in rural India spends half of what the top 5% of urban population spends. (Rs. 10,501 vs Rs. 20,824)
2. Of non-food consumption, rural and urban India spend the most on conveyance.
3. Rural and urban India spends just 3.3% & 5.78% on education, which is kinda sad! However, a part of this can be explained by free education under government schemes like “Sarva Shiksha Abhiyan.” On the other hand, expenditure for entertainment is well above 6% all over India.
4. Rent expenditure is significantly higher in urban areas (6.56%) compared to rural India. (0.78%)
5. In the food category, consumption of beverages, refreshments & processed food is the highest, followed by milk & milk products.

Please note that above data does not take into account the imputed values of items received free of cost by individuals through various social welfare programmes.

These are the highlights of the factsheet shared by the MoSPI on Saturday, 25th Feb. More details will follow which can provide deep insights into the state of consumption in India.

A country with a large youth population, consumption is going to be the backbone of the Indian economy for the coming decades. If you want to know how to create a good budget, we have got you covered. Just read this!

Goodbye, until we are back with more such insights!

Disclaimer: The above content is for informational purposes only. Please consult a SEBI-registered investment advisor before making any investment decision.