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The Indian economy has undergone a remarkable transformation in recent years, evident in the changing dynamics of household expenditure. A report by the Economic Advisory Council to the Prime Minister (EAC-PM) reveals a significant milestone: for the first time since independence, average household spending on food has fallen below half of total monthly expenditures, a phenomenon observed across both rural and urban areas. This signifies substantial progress in the country's economic landscape, reflecting improvements in living standards, access to a wider range of goods, and the effectiveness of government policies aimed at food security.
The decline in food expenditure is particularly pronounced among the bottom 20% of income brackets, both in rural and urban settings. This trend can be attributed to the Indian government's successful implementation of food security policies, which provide free food grains to millions of beneficiaries, especially those most vulnerable to food insecurity. By providing access to essential food staples, the government has effectively alleviated financial pressure on low-income households, enabling them to allocate a larger portion of their income towards other essential needs and discretionary spending.
The shift in household expenditure patterns is not merely a reflection of changing economic realities but also reflects evolving consumer preferences. The increased accessibility and affordability of diverse food items, facilitated by improvements in supply chains, infrastructure, and storage, have led to a diversification of diets. While the share of cereals in household expenditure has decreased, consumers are increasingly opting for fruits, vegetables, dairy products, eggs, fish, and meat, reflecting a growing awareness of the importance of a balanced and nutritious diet. Furthermore, the rise of processed foods, particularly among higher income brackets and in urban areas, highlights the changing dynamics of food consumption habits, driven by convenience, availability, and evolving culinary preferences.