India’s per capita consumer spending is on the rise, but it still seems to be far behind its more prosperous neighbours, particularly, its primary economic rival China. In some cases, what Indians are spending on various consumer segments is what the Chinese spent nearly or more than a decade ago, as has been pointed out in a recent presentation by Lloyd George Management — a Hong Kong-based asset manager.
The data compiled by Lloyd George Management from various sources show that India spent $109 per capita for housing in 2015, an amount that was spent by China in 2006. China’s 2015 per capita consumer expenditure for housing was at $346.
Not just housing, India is trailing China in every major category — education, auto, clothes and footwear et al by several years. The Lloyd George Management presentation showed that India’s maximum per capita consumer expenditure was on housing, followed by clothes and footwear. India’s per capita expenditure on clothes and footwear was $60. China spent this amount in 2004. China’s 2015 per capita consumer expenditure on clothes and footwear stood at $239 — nearly four times that of India.
India spent just $28 per capita on education, lagging behind China by 13 years. However, China’s 2015 per capita spending on education has not been a lot either. The country spent just $62 per capita.
The category in which India is really far off is travelling or out-of-town trips. India’s per capita expenditure on out-of-town trips was just $2 in 2015, which China used to spend in 1996. In 2015, China spent $22 per capita on its trips.
The per capita consumer expenditure is dependent on country’s per capita income levels. With a per capita income of $1,702, India currently ranks behind China’s. India’s per capita income levels may be languishing as on date, but it set for a rebound, according to the latest estimates of Morgan Stanley. The global firm expects India’s per capita income to rise to $4,135 by 2027.