Rediffusion study reveals Bharat's Household Consumption Expenditure

The Bharat Lab by Rediffusion has analysed the 2022-23 Household Consumption Expenditure Survey (HCES), which is conducted each year by the Ministry of Statistics & Programme Implementation. HCES is designed to collect information on the consumption of goods and services by households. The survey also gathers additional information on the characteristics of households as well as their demographic particulars.

The Bharat Lab study reveals that the motto of India’s earners is that if they have money, they will spend. In 2021, McKinsey coined the term ‘Revenge Spending’, which was a response to the increase in spending on luxury goods during the post-Covid-era. The report delves into what India or Bharat is currently spending on.

The HCES unveils a consumption story of India, inspiring confidence and providing insights into consumption patterns in rural India. Rural consumption and spending are the growth engines powering the future of India.

The report reveals that there is a drop of around 78% in cereal consumption over the past two decades in Bharat, which was once famous for its paddy fields, makke di roti, chule ki garam garam rotiyan. Though agriculture is still regarded as the primary occupation, Bharat the producer is different from Bharat the consumer. The study unravels how during the 1999-2000s, cereals accounted for nearly 22.16% of the monthly expenditures, with this percentage dropping to 4.91% in 2022-2023. It is debatable what the average thali and staple diet of Bharat is like now.

While the expenditure on cereals has decreased, in the past two decades there is a rise in percentage expenditure towards fruits, which include both dry and fresh. In 1999-2000, fresh fruits formed only 1.42% of the monthly food expenditure in Bharat. In 2022-2023, the percentage stands at 2.54%, which is an increase of 78%. Dry fruits have witnessed a greater increase from 0.3% to 1.17 %, a rise of around 300% in the last two decades.

Processed food and beverage consumption rises

In 1999-2000s, the monthly expenditure on packaged foods and beverages was 4.19% rising to 9.62% of the total expenditure in 2022-23, seeing an increase of 112%. Monthly expenditure on food has decreased from 59.4% to 46.38% in the last two decades.

Fuel and light expenditure falls

Despite rising inflation and oil prices, the fuel and light monthly expenditure has decreased from 7.52% to 6.66%, while the same expenditure has increased from 1999-2000 to 2011-2012.

Expenditure on consumer durables more than doubled in the past two decades

In 1999-2000, consumer durables constituted nearly 2.62% of the monthly expenditure in Bharat. In 2022-23, this number has risen by over 170% reaching 6.89 % of the monthly expenditure.

Expenditure on footwear, clothing, and bedding falls

In 1999-2000, bedding, footwear, and clothing together constituted around 7.95% of the monthly expenditure in Bharat. In 2022-23, this percentage has declined to 6.1%, witnessing a fall of 25%. Discountvertising can be attributed to for an augmentation of e-commerce and purchase of better value.

Expenditure on education increases

In 1999-2000, the spending on education constituted around 1.93% of the monthly expenditure,  which is currently standing at 3.3% of Bharat’s expenditure, seeing an increase of around 70%, suggesting clearly that the focus of Bharat is on upskilling, higher education and investing in themselves.

The expenditure in the service sector which includes banking, restaurants, entertainment, and others except for conveyance, has risen from 2.98% to 5.08% in the last two decades.

Other findings by the study

The study further reveals that there is a clear correlation between income levels and productivity, with inferences for household prosperity. It is to be noted that rural households which are engaged in non-agricultural self-employment have a significantly higher MPCE or Monthly Per Capita Consumption Expenditure, at Rs 4,195, in comparison to others who are engaged in agriculture having a MPCE of Rs 3,702.

The data underscores the importance of education and skill development in improving earning potential. With more Bharat citizens looking forward to enhancing their standard of living, engaging in pursuits beyond agriculture seems to be a better source of income, which is also apparent from the difference between the average monthly expenditure of non-agricultural and agricultural classes.

Chandigarh has the highest MPCE

The study findings reveal  that Chandigarh, a Union territory has the highest urban Monthly Per Capita Expenditure in India which is followed by Andaman and Nicobar Islands and Sikkim. The study also shows that the monthly expenditure of the East and the Heartland regions in Bharat is less than the national average.

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