The average household spending of Indian households on food declined to less than half in 2022-23 for the first time since Independence, a paper by the Prime Minister’s Economic Advisory Council noted on September 5.
The study, co-authored by EAC-PM member Shamika Ravi, noted that this development, along with rising household per capita expenditures, was a sign of progress for the economy.
The paper, based on the results of the Household Consumption Expenditure Survey 2022-23, noted that the share of expenditure on cereal has declined significantly in both rural and urban areas, with the lowest 20 percent witnessing a substantial decline.
“In all likelihood, this reflects the effectiveness of the government's food security policies, which provide free foodgrains to large numbers of beneficiaries across all states of the country, with a particular focus on the vulnerable bottom 20% of households,” it said.
The paper also argued against using the Minimum Support Price to advance the cause of farmers, advocating an increase in diversification.
“As household demand shifts and supply factors improve, the government should continue to support agricultural policies that promote the production and accessibility of diverse food items, mainly fruits, vegetables, and animal-source foods,” it said,
The paper further noted that the results indicate a shift in households' dietary preferences away from cereals to other foods like milk, eggs, and processed food.
It noted that the most significant shift has been made by the bottom 20 percent of the households, which was possible due to better infrastructure, storage and efficient transportation and schemes like Pradhan Mantri Garib Kalyan Anna Yojana, which leave more money in hands of people to spend on other food items.
“An encouraging finding is the bottom 20% of households, and the Northeastern states have shown the most significant gains in dietary diversity,” the paper said, pointing to the dietary diversity index created.
The paper also found that some of the policies targeting dietary intake, like those for anaemia have not worked.
“Our analysis reveals that policies that aim to reduce anaemia among children and women would need to focus on improving iron intake and, more importantly, consider the dietary diversity of iron sources,” the study pointed out.
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