Food now takes up less in spending bills

livemint.com:

₹6,459 in 2022-23, from ₹2,630 in 2011-12, the survey said. In rural India, this rose to an estimated ₹3,773 from ₹1,430 during the same period. In real (inflation-adjusted) terms, the growth was 40% in rural parts and 33.5% in urban parts.

The survey’s findings are not strictly comparable due to methodology changes. The latest edition of the survey, conducted between August 2022 and July 2023, assessed spending on more items than before, used computer-assisted interviews unlike the pen-and-paper format used earlier, and comprised multiple visits to the 261,746 surveyed households, unlike a single visit earlier. The share of food in per capita spending in rural areas fell to 46% in the latest survey from 53% in 2011-12—the sharp decline not being surprising given the increase in disposable incomes in this period.

In urban areas, the share of food declined to 39% from 43% earlier. These numbers do not take into account the impact of subsidies and free goods and services received from the government. The consumption of non-essential items such as durable goods comprised about 7% of per capita spending in 2022-23 across both rural and urban regions, up from around 5% in 2011-12.

The spending on conveyance rose to about 8-9% in 2022-23 across urban and rural areas, up from 4-7% in 2011-12. The survey data is essential to review the basket of goods that help compute India’s retail inflation. However, experts said that 2022-23 was an unusual year, as the economy saw pent-up demand following periods of lockdowns in the previous year and, thus, shouldn’t be used as a basis for reviewing the consumer price index.