Food in India | Representative image (Photo: Shutterstock)
The average household expenditure on food in India has fallen by more than half for the first time since 1947, according to a recent working paper by the Economic Advisory Council to the Prime Minister (EAC-PM).
The paper titled ‘Changes in Indian Food Consumption and Policy Implications: A Comprehensive Analysis of Household Consumption Expenditure Survey 2022-23 and 2011-12’ further states that significant changes are taking place in India’s food consumption pattern.
According to the document, the share of total household expenditure on food has declined substantially in rural and urban areas of all states and union territories.
“This is the first time in modern India (after independence) that the average household expenditure on food is less than half of the total monthly household expenditure and is an indicator of significant progress,” he said.
The document is a comprehensive analysis of the 2022 Household Consumption Expenditure Survey23 and its comparison with 201112.
“Overall, there has been a significant increase in the average monthly per capita household expenditure in rural and urban India across all states and Union Territories,” the document said, adding that the magnitude of the increase is substantial but varies across states and regions.
For instance, the document stated that among rural areas, West Bengal has seen a consumption expenditure growth of 151 per cent in the period between 2011-12 and 2022-23, while Tamil Nadu witnessed a growth of about 214 per cent.
Sikkim witnessed a massive 394 percent growth in consumer spending.
“Overall, we found that rural household growth was higher than that of urban households: 164 percent for rural households versus 146 percent for urban households,” he said.
According to the document, within food items, the share of expenditure on cereals has decreased significantly in both rural and urban areas.
However, he noted that this decline was more substantial for the poorest 20 percent of households in rural and urban areas.
“This most likely reflects the effectiveness of the government’s food security policies, which provide free foodgrains to a large number of beneficiaries across all states of the country, with special attention to the poorest 20 percent of households, who are vulnerable,” the report said.
The paper suggests that agricultural policies will have to adapt beyond cereals, the consumption of which is declining across all social classes.
At the same time, support policies such as MSP, which focuses overwhelmingly on grain procurement, will have limited impact on farmers’ welfare.
Across all regions and consumption classes, the paper noted a significant increase in the share of household spending on processed, packaged foods.
“This increase was universal across all classes, but most pronounced in the country’s richest 20 percent of households and significantly more so in urban areas,” he said.
While food processing is a growing sector and a major job creator, the report noted that this increasing consumption of processed and packaged foods will likely also affect health outcomes.
She also said more research is needed to understand the nutritional implications of the increasing consumption of packaged processed foods.
“Policies may be needed to regulate the nutritional content of these foods and promote healthier alternatives,” the report said.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First published: September 5, 2024 | 19:25 IS
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