The latest household consumer expenditure survey shows a considerable decline in the proportion of food consumption, particularly cereals. Concomitantly, there has also been a rise in the spending on non-essentials. This has been interpreted by many as a progression towards affluence. But is it really the case?

The elevated net indirect taxes continue to impinge on the overall domestic demand, which is already being dragged down by the decline in real household incomes.

Given the contrastingly frail household income situation, the continued slackness in private capex and deceleration in trade, the divergent core and headline real GDP growth are not trivial. 

With changes in the work status of females, predominated by the rise in agri sectors and incomes mainly from self-employment, the rising contribution of females in the labour market epitomises a stressed livelihood rather than a bountiful situation.

Incremental evidence from lagging private capex, declining household savings, and PLFS and NCAER survey showing languid incomes reinforce the K-shaped economic trajectory for India’s households.