New Delhi: Analysis by State Bank of India (SBI) shows that spending patterns of Indian households have changed significantly over the past 12 years, shifting focus from food to non-food items. A deeper analysis of the report also revealed several key trends. Consumption of cereals and pulses fell significantly, by more than 5% in both rural and urban areas.
“Consumption of ‘cereals and pulses’ has declined significantly (more than 5%) in both rural and urban areas,” the report said. The report also noted that this shift in consumption (from food to non-food) was observed in both rural and urban areas. Changes reflect changing preferences driven by economic growth, government policies and changes in lifestyles.
The report said, “Consumption behavior has shifted from food to non-food… The evolution of consumer preferences in rural and urban areas over the past 12 years has been interesting.
“The report highlights a significant decline in the proportion of food expenditure. In rural areas, the percentage of food expenditure fell by 5.86 percentage points from 52.9 per cent in 2011-12 to 47.04 per cent in 2023-24. The decline in urban areas was smaller but larger. , dropped from 42.62% to 39.68%, a decrease of 2.94 percentage points.
Instead, non-food items occupy an important place in household budgets. The proportion of non-food expenditure in rural areas increased from 47.1% in 2011-12 to 52.96% in 2023-24, an increase of 5.86 percentage points. Non-food expenditures in urban areas also increased, with their proportion rising from 57.38% to 60.32%, an increase of 2.94 percentage points.
On the other hand, spending on toiletries has increased due to the success of Swachh Bharat Abhiyan and rising hygiene awareness. Interestingly, the share of taxes and surcharges in household expenditure has declined, possibly due to rationalization of GST rates. Meanwhile, spending on apparel and footwear has also declined, a trend attributed to lower GST rates compared to earlier tax regimes.
The shift from food to non-food expenditure highlights the changing socio-economic landscape in India. Rising incomes, improved living standards and government initiatives to promote health and affordable taxation have reshaped consumer priorities, especially in rural areas. This shift highlights the dynamic nature of Indian consumer behavior and its alignment with global trends.