Indian households shift spending towards discretionary goods, services
Household spending shows a shift towards non-essential goods and services. Alcoholic beverages and tobacco spending saw significant growth, outpacing other categories. Personal care and miscellaneous goods also experienced a notable increase in expenditure. Services sector spending rose, capturing a larger share of total consumption. Essential food item spending increased, with growth in specific…
Following the economic recovery from the Covid-19 pandemic, households in India started allocating more of their spending towards non-essential discretionary goods and services in 2024-25, according to new data released by the National Statistical Office (NSO). This shift, which had been on the decline in 2023-24, is expected to potentially boost government revenues.
Notably, spending on alcoholic beverages, tobacco and narcotics saw the highest growth at 22.4%, reaching Rs 2.7 lakh crore, nearly double the amount spent on 'recreation, sport and culture' which totaled Rs 1.4 lakh crore. Furthermore, the 'personal care, social protection and miscellaneous goods and services' category increased by 19% to Rs 5.3 lakh crore.
Despite a 6% increase in the total private final consumption expenditure (PFCE) in real terms to Rs 169 lakh crore, the growth was largely driven by the services sector, which accounted for 45.2% (Rs 76.3 lakh crore) of total spending, up from 44.4% (Rs 70.5 lakh crore) in the previous year. Among the services, 'insurance and financial services' saw a 10% rise, while 'health' experienced a 9% increase.
In terms of essential categories, spending on food items rose by 4% to Rs 45.5 lakh crore, with particular growth in sugary products (11%), ready-made food items (9%), and protein-rich items such as milk, dairy, fish and seafood (nearly 7%).
Written by urgent.news from The Economic Times - Economy's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
