Incomes are rising, yet indians are spending less on food...
Food has always been an important part of indian society and economy. Till just a decade ago, the poverty line in the country was determined on the basis of how many calories a person needs in a day and how much he will have to spend for it. This is the reason why the expenditure figures in the old surveys were also mostly focused on food.
According to the data, in the 1960s, three-fourths of a family's annual expenditure was spent only on their food. However, as people started getting money to spend, they started spending less on food and more on other things.
This change was seen in the urban areas of India till the end of the 1990s. At that time people started spending more on fuel, rent, education, health, travel etc. than on food. However, now this change is being seen in rural india as well. For the first time, people in rural areas have also started spending more on other things instead of food. Now, food expenditure is less than half of the total household expenditure in both urban and rural areas.
According to the latest data, food expenditure in india now accounts for less than half of the monthly expenditure of both rural and urban people, and this share has declined rapidly in the last few decades. A book titled Data or india provides detailed information about the consumption expenditure of indian households. The book states that this is a common trend across the world, as people's income increases, they move away from manual labour, and their expenditure on food starts decreasing. This means that as people start earning more, they spend less on food because they have money to spend on other things.
For example, take developed countries like the US and Germany. people in these countries spend only 15 per cent of their total expenditure on food. This is because people there are earning more and they have money for many other needs apart from food.
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