A new SBI Research report based on HCES 2023-24 data indicates that Indian households now allocate approximately 67% of their budget to non-food items, with food spending stabilizing at 32.82%. Despite this shift toward discretionary consumption, the study highlights critical disparities in clean fuel access, nutrition, and the reach of government food security programs, signaling a significant rural-urban divide.
A comprehensive analysis by SBI Research, derived from the Household Consumption Expenditure Survey (HCES) 2023-24, has highlighted a notable evolution in Indian consumption patterns. The data, which captures information from over 261,953 households, reveals that while food remains a primary expense, it now accounts for approximately 32.82% of total household budgets. The remaining 67% is increasingly directed toward non-food items and services, a shift that generally reflects growing economic diversification and changing lifestyle preferences among Indian consumers.
However, the report warns that this shift toward non-food consumption is not uniform across the country. One of the most critical findings involves regional and gender-based disparities in nutritional intake. States such as Sikkim, Goa, and Haryana currently report the highest average household spending on protein-rich foods, whereas regions including Odisha, West Bengal, and Chhattisgarh lag behind. The study also documents a consistent gender gap, with male family members often recording higher dietary diversity in protein consumption compared to females. These variances suggest that while aggregate demand is shifting, local purchasing power and access to nutritional resources remain unevenly distributed.
The Clean Fuel Divide
The report identifies a sharp rural-urban cleavage in the adoption of clean cooking fuel. While states like Goa and Punjab demonstrate high LPG penetration, the transition is significantly slower in other parts of India. In states such as Jharkhand and Chhattisgarh, rural LPG access remains in the low teens, standing in stark contrast to urban penetration rates that exceed 75%. This energy gap is a major indicator of the persistent infrastructure challenges in rural regions. For companies operating in the consumer goods and energy sectors, this divide highlights the limitations of market penetration in rural areas compared to the urban centers where utility adoption is high.
Implications for Economic Development
The study also maps the effectiveness of government welfare schemes, specifically the Pradhan Mantri Garib Kalyan Anna Yojana. The data shows a clear geographical skew, with rural participation rates significantly outpacing urban ones in many states. In regions like Gujarat and Maharashtra, the difference between rural and urban coverage exceeds 40 percentage points. This indicates that while state-sponsored food security is reaching rural households effectively, the overall economic landscape remains fragmented.
For investors and policymakers, these findings serve as a barometer for India’s economic health. The transition of 67% of the household budget toward non-food items offers opportunities for companies focusing on lifestyle, education, and services. Yet, the rural-urban divide in clean fuel and nutritional parity suggests that structural risks, such as uneven development and vulnerability to food inflation in rural areas, remain key factors to monitor. The future of demand growth will likely depend on how effectively these regional disparities are addressed, as they directly influence the purchasing power and standard of living for a large portion of the population.