Households spend more on food in 2023-24, but its share remains below 50%

Spending on food takes a slightly larger share

Indian household spending on food items rose slightly in 2023-24, as spending on all food items barring edible oil rose from the previous year, but remained below 50 percent, data of Household Consumption Expenditure Survey 2023-24 released on December 27 showed.

In rural areas, food expenditures accounted for 47.04 percent of total consumption spending in 2023-24, compared with 46.38 percent in 2022-23. The share of vegetables in total expenditures rose to 6.03 percent, compared with 5.38 percent the previous month.

Fruits' share rose to 2.66 percent from 2.54 percent in the previous year, while edible oil’s share in total spending declined to 2.77 percent from 3.59 percent.

A rise in spending could be attributed to higher food inflation over the past year. Vegetable inflation has remained in double digits for 13 months.

Edible oil, on the other hand, had witnessed a deflation during the period of the survey.

This is also evident from the decline in monthly per capita consumption of cereals in both urban and rural areas, even as the share of cereals in household spending rose.

Despite the rises across the board, household spending on food remained below 50 percent, marking a significant departure from the 2011-12 survey, when households spent 52.9 percent of their budget on food.

The results of the 2022-23 survey, released earlier this year on February 18, showed that household spending on food had declined below 50 percent for the first time, while non-food expenditures had risen.

In urban areas, food consumption was also higher, at 39.68 percent in 2023-24, compared with 39.17 percent in the previous year.

Food trends have changed over the past decade, as processed food, vegetables, and milk account count for more spending than cereals in urban and rural areas.

Non-food expenditures fell, but clothing, conveyance and consumer services accounted for a higher share of spending than the previous year.

Spending on non-food items was lower at 52.96 percent in rural areas compared with 53.62 percent in the previous year, but the share of consumer services rose to 5.67 percent from 5.24 percent earlier.

In urban areas, entertainment and education rose in spending, while overall share of non-food items declined to 60.32 percent.

The government has decided to use the results of HCES 2022-23 for CPI calculation. The new series of CPI and GDP based on these trends will be available from February 2026.