New Delhi: The average household spending on food across the country in both rural and urban areas has reduced to less than half for the first time since 1947, a working paper by the Economic Advisory Council to the Prime Minister (EAC-PM) has revealed.
The paper analyses household consumption expenditure surveys conducted in 2022-23 and 2011-12 and has revealed that significant changes have taken place in India’s food consumption pattern, the Business Standard reported.
“It is the first time in modern India (post-independence) that average household spending on food is less than half the overall monthly spending of households and is a marker of significant progress,” the paper said.
While there has been a significant increase in households’ average monthly per capita expenditure across rural and urban India across all states and UTs, the magnitude of rise varies across states and regions, according to the paper.
For instance, West Bengal reported a consumption expenditure growth of 151% between 2011-12 and 2022-23, while Tamil Nadu saw a growth of approximately 214% in the same period. Consumption expenditure grew in Sikkim by a massive 394%, the paper said.
Other trends
According to the paper, the consumption expenditure growth for rural households (164%) was higher than that for urban households (146%).
Within food items, the share of expenditure on cereal declined significantly across rural and urban areas. This decline was more pronounced for the bottom 20% of both urban and rural households, the paper said.
“In all likelihood, this reflects the effectiveness of the government’s food security policies, which provide free food grains to large numbers of beneficiaries across all states of the country, with a particular focus on the vulnerable bottom 20% of households,” the paper noted.
Owing to the falling consumption expenditure on cereals, the paper suggested that agriculture policies will have to be tailored beyond these food grains.
At the same time, support policies like MSP, which overwhelmingly targets cereal procurement, will have a limited impact on the welfare of farmers.
The paper also pointed out that universal increase in the share of household expenditure on served and packaged processed food.
“This increase was universal across the classes but more pronounced for the country’s top 20% of households and significantly more in urban areas,” it said.
The report highlighted that while food processing is a growing industry and an important source of employment, the increasing consumption of packaged foods could have an impact on people’s health.
The paper suggested that more research is necessary to understand the impact this may have on nutritional outcomes and that policies may be required to regulate nutritional content of packaged food.
