Households spend under 50% on food for first time since 1947

For the first time since 1947, Indian households are spending less than 50% of their total monthly budget on food. The analysis highlights a significant rise in overall expenditure and a marked decline in food spending, particularly on cereals. This shift is largely attributed to the effectiveness of government food security programs aimed at supporting vulnerable populations.

Changes in India’s Food Consumption and Policy Implications: A Comprehensive Analysis of Household Consumption Expenditure Survey 2022-23 and 2011-12 reveals that India has achieved a historic milestone. For the first time since 1947, households have reduced their spending on food to less than 50% of their total monthly expenses, according to the Economic Advisory Council to the Prime Minister (EAC-PM).

The report highlights significant shifts in food consumption patterns across India. It shows that households in both rural and urban areas now allocate a smaller portion of their budgets to food, a trend observed in all states and union territories.

“This is the first time in modern India that households spend less than half of their total monthly budget on food, indicating significant progress,” the report states.

The analysis compares data from the Household Consumption Expenditure Surveys for 2022-23 with those from 2011-12, revealing a notable increase in average monthly per capita spending nationwide. Rural households have seen their expenditures rise by 164%, while urban households have experienced a 146% increase.

The report also points out a substantial drop in spending on cereals across both rural and urban areas, especially among the lowest 20% of households. This decline results from the success of government food security programs, which provide free grains to millions, focusing particularly on the most vulnerable populations.

The paper noted that while the overall increase in consumption expenditure is significant, it varies by state and region. For instance, rural areas in West Bengal experienced a 151% growth from 2011-12 to 2022-23, Tamil Nadu saw an approximate 214% increase, and Sikkim had an impressive 394% rise. The paper also highlighted that rural households experienced a higher growth rate in expenditure compared to urban households, with a 164% increase for rural versus 146% for urban areas.

Additionally, the paper observed a significant decline in the proportion of spending on cereals in both rural and urban areas. This decrease is especially pronounced among the lowest 20% of households in these regions.