Indians spend less on cereals, more on proteins, durables and entertainment

Written by Surabhi Rastogi | Surabhi | New Delhi | Updated: Jul 2 2014, 14:02pm hrs
Spending IndiaPer head consumption of rice in rural India now is only 11.23 kg and 9.32 kg in urban India.
The average urban Indian keeps 12 per cent of her monthly non-food budget for education, 10 per cent for medicines and 11 per cent for transport.

Her rural sister spends a little less on education and transport but spends much more, 14 per cent for medical needs, the latest data on consumption pattern of households brought out by the government shows.

Gold is a big attraction for both of them, with almost a quarter of their spending on durables going to it and both have moved away from saris. Just 16 per cent of their budget for clothes is spent on saris with shirts, trousers and readymade garments far more popular across the country.

For both of them, proteins, fruits and vegetables account for 48 per cent of their monthly food budget, which explains why prices of these items have become so sticky.

The data shows that in ten years since FY05, Indians in rural and urban areas have sharply cut back on their expenditure on cereals. Despite the UPA governments enthusiasm for providing rice and wheat to people, monthly budget for these products within food was only 20 per cent in rural areas and even less 15 per cent in urban areas.

These are a part of the 68th round survey by the National Sample Survey Organisation (NSSO) on Household Consumption of Various Goods and Services. The data will be ploughed by the government for policy planning and for construction of indices such as the consumer price inflation index while private sector companies, especially in the FMCG sector, will exploit the data to fine tune their marketing strategies.

Per head consumption of rice in rural India now is only 11.23 kg and 9.32 kg in urban India. So, even though they are buying most of their rice and wheat from the public distribution system, it has not helped their income to grow.

Significantly, urban Indians also prefer to eat out more. Across all income classes, they eat out at least once every week. For both urban and rural sisters, milk is a major item in their diet. Milk and milk products command a share of 7 and 8 per cent of total consumer expenditure, respectively.

The findings are based on a survey in FY12 of 1,01,651 households in 7,469 villages and 5,268 urban blocks spread over the entire country.

It shows entertainment has become dominant with a 270 per cent rise in the number of homes spending on cable TV subscription and per person expenditure on such subscriptions rising 5.9 times in rural India between FY05 and FY12.

Naturally this has been propelled by a rise in availability of electricity. Nearly all urban homes (96 per cent) now have electricity while two thirds of rural households (74 per cent) also consume electricity. The data for rural India was 67 per cent in FY10.