What India’s Household Consumption Survey reveals about changing lives and aspirations

India’s consumption story is often reduced to growth rates and income numbers. But the Household Consumption Expenditure Survey (HCES) tells a more grounded story — of what Indian households actually spend on, how priorities shift as incomes rise, and what this reveals about economic transition on the ground. The latest HCES rounds for 2022-23 and 2023-24, released by the “Ministry of Statistics and Programme Implementation”, offer the first comprehensive update to consumption patterns in over a decade, making them critical for poverty estimation, social policy, and understanding India’s expanding middle-income population.

What the Household Consumption Expenditure Survey measures

The HCES is conducted roughly every five years and captures detailed spending patterns of Indian households across rural and urban areas. Its core metric is Monthly Per Capita Expenditure (MPCE), which reflects average consumption spending per person across a wide basket of goods and services — from food and fuel to housing, health, education and transport.

The 2022-23 and 2023-24 rounds are especially significant because they bridge a long data gap since 2011-12. They provide granular, updated insights into how Indian households allocate every ₹100 of their consumption expenditure, offering a window into changing living standards and aspirations.

Food spending declines — a textbook case of Engel’s Law

One of the clearest long-term trends is the declining share of food and beverages in total consumption. Between 1999-2000 and 2023-24, food expenditure in urban India fell from ₹48 to ₹39 per ₹100 of spending, while in rural India it declined from ₹59 to ₹47.

This pattern strongly confirms Engel’s Law — the economic principle that as real incomes rise, the proportion of income spent on food falls, even if absolute spending increases. The shift signals improving living standards, particularly in rural areas where food once dominated household budgets.

From cereals to protein and processed foods

Within food expenditure itself, composition matters. The data show a decline in spending on cereals alongside rising expenditure on fruits, eggs, fish, meat and processed foods. This reflects a gradual move away from staple-heavy diets toward more diversified, protein-rich consumption.

However, this transition is uneven. While urban households and higher-income groups benefit more from dietary diversification, poorer households still face nutritional constraints. The data therefore point to progress, but also to persistent inequality in food quality and nutrition.

Intoxicants remain marginal — but not irrelevant

Spending on pan, tobacco and intoxicants remains a relatively small share of MPCE, staying under ₹3.8 per ₹100 even after marginal increases, particularly in rural areas. From a public health standpoint, this low share is reassuring at the aggregate level.

At the same time, experts note that even small increases in rural consumption of intoxicants warrant targeted awareness and prevention programmes, especially in regions where health infrastructure is weak and addiction-related harm can be severe.

Fuel spending falls as households switch to modern energy

A notable decline in per capita fuel expenditure reflects structural changes in energy access. Schemes such as Saubhagya (near-universal rural electrification) and “Pradhan Mantri Ujjwala Yojana” have enabled households to shift away from biomass and kerosene towards electricity and LPG.

In urban areas, lower fuel spending also reflects greater use of energy-efficient appliances and more reliable power supply. This is a classic example of expenditure substitution — where households spend less not because of deprivation, but because technology and policy have improved access and efficiency.

Clothing and footwear: from necessity to discretion

The share of spending on clothing, bedding and footwear has declined moderately over time. This aligns with a broader transition from need-based consumption to more periodic and discretionary spending. Greater competition, falling textile prices, fast fashion, and improved supply chains have made clothing more affordable.

Rural households showing similar or slightly higher shares may reflect seasonal dependence, social obligations, and rising aspirations rather than basic unmet needs.

Housing costs rise sharply in urban India

One of the starkest divergences between rural and urban India appears in housing. Urban rent expenditure rose from ₹4.46 to ₹6.58 per ₹100 of spending between 1999-2000 and 2023-24, mirroring rapid urbanisation, migration to metropolitan centres, and mounting rental stress.

In contrast, rural rent remains negligible, largely due to self-owned housing, informal tenure, or rent-free living arrangements. The data underscore how urbanisation is reshaping household budgets and amplifying inequality within cities.

Miscellaneous spending captures rising aspirations

The most telling shift is in the “miscellaneous” category, which includes health, education, transport, consumer services and other aspirational expenses. Its share has risen sharply, especially in rural India — from ₹21.87 to ₹35.82 per ₹100 of spending.

This expansion reflects a broadening consumption basket, deeper digital penetration, better access to services, and improving quality of both public and private provision. It is also a marker of inclusive growth, where households move beyond subsistence towards investments in mobility, skills and well-being.

What these consumption shifts tell us about India’s transition

Taken together, the HCES trends point to a society in economic transition. Indian households are gradually reallocating spending away from basic survival needs towards housing, services, health, education and lifestyle consumption. This shift is essential for understanding poverty reduction, middle-class expansion, and future demand patterns.

For policymakers, these insights are central to revising poverty lines, redesigning social sector schemes, and anticipating pressures in housing, healthcare and urban infrastructure. Beyond statistics, the survey captures a deeper reality: India’s consumption landscape is changing — unevenly, but unmistakably — as millions navigate the path from subsistence to aspiration.