Indians shift spending towards discretionary goods
India's post-pandemic economic recovery has led to a shift in household spending towards discretionary goods and services, according to the latest national accounts data released by the National Statistical Office (NSO). In the 2024-25 fiscal year, non-essential spending on alcoholic beverages, tobacco, and narcotics witnessed a significant rebound of 22.4%, surging to Rs 2.7 lakh crore.
This outpaced growth in all other item categories, with spending on recreation, sport, and culture falling to Rs 1.4 lakh crore. Similarly, the category of 'personal care, social protection, and miscellaneous goods and services' saw a notable rise of 19% to Rs 5.3 lakh crore.
While total private final consumption expenditure (PFCE) grew by nearly 6% to Rs 169 lakh crore in 2024-25, much of this increase was driven by the services sector. The share of spending on services in the total PFCE rose to 45.2% (Rs 76.3 lakh crore), up from 44.4% (Rs 70.5 lakh crore) in the previous year. Among services, 'insurance and financial services' experienced a 10% increase, while 'health' saw a 9% rise.
In essential categories, spending on food items increased by 4% to Rs 45.5 lakh crore. Notably, growth was observed in spending on sugary products (11%), ready-made food items (9%), and protein-rich items such as milk, dairy products, fish, and seafood (nearly 7%).
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