Food is essential for human beings to survive. As human kind evolved, food no longer was free of cost; everything had a price tag to it. People as a household now had to allocate a part of their income on food. Budget on food depends on the size of a family. For example, the Sharma family consists of just the father, mother and two children. Here a small part of Sharma’s income goes into budget on food. Budget allocations for non-food items share a very small percentage taking into consideration the life style of a family.

A country as a whole is divided into two geographical sectors; urban and rural. The different education qualification, employments, income and lifestyle of the people in both rural and urban India reflects on the expenditure made on consumption of goods and services that include food and non-food item groups. We are looking at a data produced by the National Sample Survey that surveyed key indicators of household consumer expenditure in India.  The data covers surveys from the year 2004, but we are using data for the years 2011-12 considering it to be the latest data.

Food consumption accounted for most of the household expenditure in the survey conducted during 2011-12 of both rural (53% ^) and urban (42.6%) India. On an average, food consumption accounted for the overall budget expenditure of a household in both rural and urban India. According to the reports by NSS, household consumption food was much lesser than that f rural India accounting food items that includes 9% by beverages and processed food, 7% by milk and its products and less than 7% on cereals. The survey also indicates that the expenditure on food also includes the value of home produced food consumption. Processed food plays a major role in the budget of households in urban sector.

Consumption of cereals and milk (its products) is more in rural India mostly because of the agricultural background and self produced. The average household expenditure on food has increased since 2004-05 in both rural and urban India indicating the value of a consolidated income.

But non- food item groups had comparatively higher consumption expenditure in urban India. The data is calculated on the basis of average of the entire estimated population. Rent has taken an increased share in urban India since 2004-05 over 1% with conveyance also having an increase in 1%. Expenditure on education has witnesses an increase in share in both the sectors over the years. Entertainment has played a vital role in consumer expenditure over the years in both sectors resulting in an increase of share to 1%.

 

Sources: NSS 68^th Round, Key Indicators of Household Consumer Expenditure in India, July 2011-June 2012.

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