Rural, urban food spending rises amid inflation pressure, shows HCE report

The share of monthly per capita consumption expenditure (MPCE) on food items edged up slightly in both rural and urban areas during the August 2023–July 2024 (2023-24) period compared to the previous year, according to the latest Household Consumption Expenditure Survey (HCES). However, experts note that the increase falls within the margin of error and could represent a temporary fluctuation rather than a reversal of trends.

 

Of the total MPCE, the proportion spent on food items rose to 47.04 per cent in rural areas and 39.7 per cent in urban areas in 2023–24, up from 46.4 per cent and 39.2 per cent, respectively, in 2022–23.

 

 

The factsheet based on the survey released by the National Statistics Office (NSO) on Friday revealed that the MPCE in rural areas during the 2023–24 period rose by 9.2 per cent to Rs 4,122, while urban household expenditure rose by 8.3 per cent to Rs 6,996 over the same period. These figures are in nominal terms and exclude the value of items provided free of cost to households under various social welfare programmes.

 

The data shows that spending on cereals increased marginally, with rural areas allocating 4.99 per cent of their MPCE and urban areas 3.76 per cent in 2023–24, compared to 4.91 per cent and 3.64 per cent in 2022–23. This comes even as average monthly per capita cereal consumption declined slightly in both rural India (from 9.61 kg to 9.35 kg) and urban India (from 8.05 kg to 8.02 kg) during the same period. 

 

Spending on other food items such as beverages, pulses, vegetables, fruits, eggs, meat, and spices also saw an increase in both rural and urban areas.

 

Conversely, among non-food items, rural households reduced spending on medical care, education, rent, fuel, and durable goods.

 

In urban households, spending decreased on items like pan, tobacco, fuel, medical care, conveyance, durable goods, and consumer services.

 

The gap in average monthly consumption expenditure between rural and urban households narrowed slightly, with rural households now spending 69.7 per cent of what urban households spend, down from 71.2 per cent in the previous period.

 

P C Mohanan, former acting chairman of the National Statistical Commission (NSC), attributed the rise in food expenditure partly to the high food inflation witnessed over the past year. “A variation of this magnitude is within the margin of error. Consumption patterns usually don’t change in such a short duration. The prices of almost all food items, including vegetables, fruits and pulses, have been quite high over the past and they surely altered the budgets of the households. However, this is more of a temporary blip,” he added.

 

Pronab Sen, former chief statistician of India, noted that the NSO conducted two back-to-back consumption expenditure surveys to verify the robustness of methodological changes. “The results that have come about are fairly consistent and the sort of variation observed is well within the margin of statistical error. This does not indicate a reversal of trend,” he said.

 

Including the value of free social welfare services, the MPCE was calculated at Rs 4,247 for rural households and Rs 7,078 for urban households.

 

Among states, Sikkim reported the highest MPCE, with Rs 9,377 in rural areas and Rs 13,927 in urban areas, while Chhattisgarh recorded the lowest, at Rs 2,739 in rural areas and Rs 4,927 in urban areas. Among Union Territories, Chandigarh topped the chart, with Rs 8,857 in rural areas and Rs 13,425 in urban areas.

 

The survey, based on a sample of 261,953 households (154,357 in rural areas and 107,596 in urban areas), is a critical tool for understanding household consumption patterns. It is the second survey conducted using an improved methodology recommended by the National Statistical Commission, following the receding of the pandemic.