Indians spending on eating out, transport at a decade high amid consumption slump

Indians spent more on restaurants and hotels in FY24

The slump in consumption growth in FY24, which has caused widespread concern, has left some pockets untouched, with Indians spending more at restaurants, hotels and on durable goods, a Moneycontrol analysis of GDP data shows.

The share of restaurants and hotels in total consumption spending rose to its highest level in over a decade at 2.3 percent in FY24 compared with 2.1 percent in the previous fiscal.

The rise comes after Covid-related restrictions brought down spending on eating out and travel to a percent of total consumption spending.

It is not just restaurants and hotels, Moneycontrol found that services spending rose to its highest level of 49.8 percent in FY24, up from 48.8 percent in the previous year and 46 percent a decade and a half ago.

Durable goods share also rose to its highest level of 3.2 percent since 2011-12, while semi-durable goods’ share in consumption declined to the lowest level, barring the pandemic period.

In constant terms, the rise in durable goods spending was the second fastest at 8 percent, following the increase in services at 9.1 percent.

Besides food, health, education and transport accounted for a 37 percent jump in spending in FY24.

Health spending was up 17.4 percent in real terms, while transport spending rose 9.4 percent and education was up 10.4 percent.

The share of these categories in total spending rose from 22.5 percent in FY12 to 25.7 percent in FY24.

This was also reflected in the government's Household Consumption Expenditure Survey data released in 2024, which pointed to transport spending as the major expenditure across states.

According to HCES, the share of conveyance increased to 7.4 percent in 2023-24 compared with 4.2 percent in FY12 in rural areas and from 6.5 percent to 8.4 percent in urban areas.

While Indians spend less on alcohol, tobacco and narcotics than they did a decade ago, FY24 witnessed a double-digit rise in alcohol spending. The amount spent on alcohol rose 15.4 percent in FY24 from the previous fiscal.