Fall in share of food in rural consumption basket indirectly indicates uptick in rural income
The fall in the share of food below 50 per cent mark at 46.3 per cent in the rural consumption basket is projected to have significant implications for the upcoming decade, according to a report by JM Financial Institutional Securities.
India’s latest household consumption survey for 2022-23 indicates a positive outlook for the rural economy, with a decrease in the share of food suggesting a rise in rural income, particularly from non-agricultural activities. This contrasts with previous corporate commentary lacking evidence of rural consumption growth.
There is a notable increase in the share of durable goods and a decline in footwear and clothing, signaling a boost in rural income. Effective fiscal policies have mitigated the impact of fuel costs on consumption patterns despite fluctuations in Brent crude prices.
The rising preference for beverages, processed food, and household consumables aligns with increased penetration by FMCG companies in rural areas. The report also highlights a sharper increase in conveyance spending in rural areas compared to urban regions, indicating reduced consumption disparity due to public policies addressing poverty.
