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A new working paper from the Economic Advisory Council to the Prime Minister shows that Indian households are spending a larger share of their budgets on non-food items, especially consumables, services and durable goods. The study, comparing data from 2011-12 and 2023-24, finds a notable rise in spending on durables across all states, with rural households in some regions even surpassing urban levels. Mobile phone ownership is now nearly universal, while laptop and computer penetration remains limited. The paper highlights declining TV ownership as mobile screens replace traditional viewing. It also notes strong growth in motor vehicle ownership, supported by better roads, market access and wider availability of finance.
A working paper issued earlier this past week by the Economic Advisory Council to the Prime Minister reported that households are now directing a larger portion of their consumption expenditure towards non-food categories, notably consumables, services and durable goods. The paper, titled Changes in Durable Goods Ownership in India: Analysis of the Household Consumption Expenditure Survey 2011-12 and 2023-24, observed that the share of monthly per capita expenditure devoted to durables has increased in both rural and urban areas, with rural figures marginally overtaking those of urban households in several states. Advertisement
The council noted that in absolute terms, measured in INR, spending has risen across all states and sectors, although urban households continue to record higher outlays. The paper added that consumables and services now form the largest component of urban household expenditure, reflecting a broader structural shift in spending behaviour.
It said that mobile phone ownership has expanded substantially across demographic segments, with near-universal access indicating improved connectivity for almost the entire population. The report observed that affordable and faster network services have positioned mobile phones as the preferred medium for communication, information and entertainment.
However, the expansion in laptop and personal computer ownership has been comparatively slower and remains limited to specific households. The study attributed this trend to specialised usage requirements and limited technical familiarity among a large section of the population.
The working paper highlighted that declining ownership of televisions in many states, combined with the near-universal presence of mobile phones, indicates that mobile screens are increasingly replacing or complementing traditional television viewing. It added that expenditure on durable goods-such as transport equipment and household appliances-serves as an important indicator of economic well-being and improved living standards.
The study pointed out that durable consumption reflects long-term utility and enhanced productivity for households. Comparing the 2023-24 survey with that of 2011-12, the paper found notable progress in spending on durable assets and an increase in ownership of essential household durables.
Across the three broad consumption categories-food, consumables and services, and durable goods-the share of food expenditure has fallen to below half in both rural and urban regions. The analysis also noted a shift away from spending on basic requirements such as Clothing and Footwear, with even the bottom 40 per cent of households increasing expenditure on Personal Goods and on Cooking and Household Appliances.
According to the findings, motor vehicle ownership has emerged as the fastest-growing category among durable assets. The paper stated that urban and rural households are witnessing strong convergence in vehicle ownership trends, including among the bottom 40 per cent. Improved market linkages, better road networks and greater access to vehicular finance-particularly from non-banking lenders-were cited as contributing factors behind this broad-based increase.
Source - PTI
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