The trend is important as it gives a hint about the outcome of the Consumption Expenditure Survey (CES), which will be released by the National Statistics Office within a month or two. The CES forms the basis for deciding the sources and weights of private consumption expenditure in the national accounts; the data that is used for GDP formulation.
“From food and beverages, transport and communication, which are more of necessities, the spending has been shifting towards clothing and footwear, health and education, and housing and maintenance,” the Survey said.
The data from the NSO shows the share of food and beverages has reduced from 33.2 per cent of private consumption in 2011-12 to 30 per cent in 2017-18 — a reduction of over three percentage points.
As more children are attending school and college, incomes are rising. Spending on health and education has started occupying a larger pie in the consumption mix. Their share increased from 7.4 per cent in 2011-12 to 9.2 per cent in 2017-18.
“This shows an increase in discretionary spending by households, compared to necessities,” noted the Survey.
Spending on housing, its maintenance and basic household necessities, such as electricity and water, reduced as a share of overall spending, from 19.6 per cent to 17.3 per cent, over six years.
The Survey noted spending on services was rising vis-à-vis goods. In another chapter, the Survey found inflation in services in recent times has been higher than that for goods.