Urban-rural consumption gap narrowing, Indians spending more on processed food: Govt survey

Mumbai: Indians are spending a larger portion of their income on processed food, according to a government survey. The gap between rural and urban consumption spending has continued to narrow, though at a slower pace, as revealed by the Household Consumption Expenditure Survey (HCES) for 2023-24, released by the Ministry of Statistics and Programme Implementation (MoSPI) on January 30, 2025.

The survey highlights an unusual trend, showing that the highest contribution to food expenditure comes from beverages, refreshments, and processed food in both rural and urban India. In rural areas, this category accounts for 9.84% of total food expenditure, followed by milk and milk products at 8.44%. A similar pattern is observed in urban areas, where beverages, refreshments, and processed food make up 11.09% of food expenditure, with milk and milk products contributing 7.19%. This shift may be driven by changing lifestyles, greater availability of processed food options, and rising incomes, particularly in rural areas. However, concerns persist about potential health implications associated with the increased consumption of less nutritious, processed foods.

Providing key insights into India's consumption patterns and economic well-being, the survey reveals that the Monthly Per Capita Consumption Expenditure (MPCE) gap between urban and rural areas stood at 70% in 2023-24, slightly lower than the 71% recorded in 2022-23. The data also shows an overall rise in average MPCE across all household types. In rural India, the average MPCE increased to Rs. 4,122 in 2023-24 from Rs. 3,773 in the previous year, while in urban India, it rose to Rs. 6,996 from Rs. 6,459. These figures, calculated without considering the imputed values of items received free of cost through social welfare programs, indicate an overall improvement in economic well-being across the country.

The survey also highlights a decline in consumption inequality across major states in both urban and rural areas, as measured by the Gini coefficient, which ranges from 0 (perfect equality) to 1 (perfect inequality). A lower Gini coefficient suggests a more even distribution of consumption expenditure. In 2023-24, the Gini coefficient dropped to 0.237 in rural areas and 0.284 in urban areas, compared to 0.266 and 0.314, respectively, in 2022-23. This decline suggests that the gap between the rich and the poor in terms of consumption is shrinking.

Regional variations in consumption trends show that among the 18 major states, Odisha recorded the highest increase in average MPCE in rural areas at 14%, while Punjab saw the highest rise in urban areas at 13%. Maharashtra registered the lowest increase in rural areas at 3%, while Karnataka had the smallest rise in urban areas at 5%.