E-Paper
India's evolving consumption landscape
This article is authored by Saurabh Garg and Atul Satija.
India's economic trajectory has often been captured through stories of factories humming, investments rising, and employment expanding. Yet the quiet transformation of India's households, reflected vividly in their consumption patterns, reveals an equally compelling narrative. What Indians choose to eat, how much they spend, and the changing composition of their daily expenditure offer profound insights into the evolving socio-economic landscape of a nation on the move.
The recently released Household Consumption Expenditure Survey (HCES) 2023-24, published by the ministry of statistics and programme implementation (MoSPI), is a landmark document that ends a decade-long hiatus of detailed consumption data. Its findings illuminate a nation that is undeniably progressing: spending more, diversifying diets, and gradually narrowing the persistent gap between rural and urban living standards. This transformation is also reflected in India’s recent progress, as highlighted in the 2025 State of Food Security and Nutrition in the World (SOFI) Report, which shows 19 million people lifted out of undernourishment in India between 2023 and 2024, more than double the nine million recorded in 2023. These figures point to substantial progress in addressing food security despite challenges such as population growth, the residual effects of the pandemic, and waves of global food inflation.
The latest HCES further captures such significant shifts in household consumption patterns, indicating substantial progress across multiple domains. Consider first the headline figures. India's average monthly per capita expenditure (MPCE) in rural regions stands at ₹4,122, while the urban counterpart is ₹6,996. Adjusted for inflation, these numbers represent tangible real gains in consumption levels. Significantly, the rural-urban expenditure gap has narrowed appreciably from 84% in 2011-12 to 70% in 2023-24. This convergence underscores the impact of targeted welfare schemes, improved rural incomes, and greater penetration of goods and services into rural markets.
Yet, beyond mere expenditure figures, the changing composition of the Indian household's consumption basket speaks volumes. Food, historically dominant in household budgets, has seen its share diminish- from over half of total expenditure in rural areas in 2011-12 to approximately 47% today. Urban households have reduced their food expenditure even further, to about 40%. This transition aligns closely with Engel's Law, which posits that as incomes rise, households allocate a smaller proportion of income to food, freeing resources for other forms of consumption.
What Indians choose to eat is evolving significantly. Cereals, the traditional cornerstone of the Indian diet, now constitute merely 5% of rural household expenditure and less than 4% in urban households. In their stead, consumption of proteins such as milk, meat, eggs, etc. has risen, alongside a marked increase in processed foods and beverages. Indeed, among the fastest-growing food categories are packaged snacks and refreshments, reflecting not only rising affluence but shifting consumer aspirations driven by increased exposure to urban lifestyles, even in the remotest parts of the country.
Equally illuminating is the rise in non-food expenditure, signaling deeper socio-economic shifts. Rural households today spend substantially more on transport, communication, education, and consumer durables. Mobile phones, once symbols of urban privilege, are now ubiquitous across India's rural landscape, facilitating access to information, markets, and opportunities. Investments in housing, healthcare, and financial services have also risen notably, demonstrating greater rural integration with the formal economy and enhanced confidence in future prosperity.
Importantly, the survey reveals a positive trend towards reduced consumption inequality. India's rural Gini coefficient, a measure of consumption inequality, has fallen to 0.237, while in urban areas it stands at 0.284--both marking an improvement from earlier years. Notably, between 2022 and 2024, consumption among the bottom 5% of households experienced the highest percentage increase, indicating that economic gains, while uneven, are increasingly reaching those at the base of the pyramid.
Yet, progress, however commendable, brings its own complexities. The rising consumption of processed and packaged foods raises legitimate nutritional and public health concerns. While dietary diversity and calorific adequacy have improved, the growing preference for high-sugar, high-sodium snacks poses potential long-term health challenges, particularly among vulnerable populations. Further, although rural-urban gaps have narrowed nationally, significant regional disparities persist. In some states like Kerala, rural consumption nearly equals urban standards, whereas in few others, inequalities remain, underscoring the need for more tailored policy interventions.
These nuances highlight the critical role consumption data must play- not merely as indicators of economic progress but as diagnostic tools for policy. Consumption patterns offer policymakers nuanced insights into societal shifts, enabling timely identification of emerging vulnerabilities and facilitating precise interventions to address nutritional, regional, and socio-economic disparities.
As India moves ambitiously towards becoming a $5 trillion economy, understanding the complexities embedded within consumption choices becomes increasingly vital.
Consumption is no longer simply about calories and survival; it has evolved into a marker of aspiration, dignity, and informed choice. The evolving Indian plate thus reflects more than changing tastes—it is a testament to India's broader economic journey and its people's evolving aspirations. Policymakers and development practitioners alike must remain sensitive to these shifts, guiding India thoughtfully towards inclusive and sustainable growth.
This article is authored by Saurabh Garg, secretary, ministry of statistics and programme implementation, GOI and Atul Satija, founder and CEO, The/Nudge Institute.
