Good health and alcohol consumption are rarely mentioned together, but during FY24, households spending on these two buckets rose at the fastest pace, a Moneycontrol analysis of data released by the government last week showed.
India’s households spending on alcoholic beverages and tobacco rose 15.7 percent in FY24 - the highest since FY12 - compared to a meagre 1.6 percent rise a year ago, likely as people tried to leave behind the pandemic period lull.
Not just alcoholic beverages, health expenditures by households too saw a rise, jumping 17.4 percent during this 12-year period, while FY23 saw a 7.2 percent growth.
The rise in health spend - which includes medicines, hospitals and doctor visits - was the highest since the start of the new household spending series in FY17. The spending patterns are part of the household consumption expenditure, used to compute GDP growth and is released with a gap of a year.
Food and non-alcoholic beverages witnessed a mere 0.5 percent rise on year, while spending on clothing and footwear was lower in FY24. The slow pace of rise in food and non-alcoholic beverages could be reflective of improving income levels, as better off households tend to spend less on food and more on discretionary goods and services.
Miscellaneous goods and services, like personal care items and services, witnessed a 9.9 percent rise in spending, fastest since FY15. Restaurants and hotels continued the phenomenal rise, growing in double-digits for a third consecutive year, even as growth tapered.
Spending in the segment rose 18.1 percent compared with 68.7 percent rise in the previous year.
How India Spends?
Recreation and cultural events suffered a jolt where the spending contracted by 4.1 percent in FY25. Overall, consumption expenditure was up just 5.6 percent in real terms from 7.7 percent the previous year.
The slowdown in food expenditure was visible in the Household Consumption Expenditure Survey for 2023-24, which saw the ratio of money spent on food decline below half for the first time in over a decade for rural areas.
India’s consumption spending picked up in FY25 to 7.6 percent, according to preliminary data released by the government in February. The government will release provisional numbers for FY25 on May 30.
The government is expecting a boost in spending to come from the Maha Kumbh, which saw over 60 crore devotees attend the event over nearly two months.
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