Food's share in consumption kitty falls, but not sharply

Urban-rural gap narrows, high rural inflation also a reason

- PRIYANSH VERMA

• FINDINGS OF 2022-23 SURVEY

WHILE THE FINDINGS of the all-India Household Consumption Expenditure Survey 2022-23 published on Saturday revealed a decline in the share of food items in the consumption basket in the last decade, the fall was less steeper than widely expected. This shows that even though the absolute amount of food consumed by households may have started rising at a slower pace due to the reduction in poverty, the consumption of high-value food items may have jumped, economists say.

This is significant because the new Consumer Price Index (CPI) basket - a metric to measure prices of key commodities and services - may not see a major decline in the share of food items, as expected earlier. The current CPI, with the base-year 2012, accords 39.1% weight to food items, while food and beverages' constitute 45.9% of the index.

Consumption in the household sector reflects the levels of living and the demand dynamics in the economy. It is also a proxy for poverty incidence.

Food's share in monthly per capita consumption expenditure (MPCE) for rural households decreased to 46.4% in 2022-23 from 52.9% in 2011-12, the immediate past year for which survey results are available, while that of urban households declined to 39.2% from 42.6%.Several economists had earlier expected the food's share in the consumption basket to fall around 35-36% at the aggregate level, but as per the current data, it's around 43%.