Average Consumer Spending in India

Budgeting monthly or annual expenses is an important part of anyone's financial health. We analysed the most recent data from the Ministry of Statistics and Programme Implementation (MoSPI) to help consumers understand how their spending compares to the average Indian's and nationwide trends over time.

Key Findings

  • On average, Indians spent Rs. 77,085 per person in 2017-18.
  • Indians spend the most on groceries (Rs. 21,491 / 28%), with housing & utilities (Rs. 13,293 / 17%) and transportation (Rs. 12,333 / 16%) being the second and third biggest categories, respectively.
  • Health spending has grown most quickly since 2013 (17% on average annually, unadjusted for inflation), while Alcohol, Tobacco & Narcotics has grown the most slowly (6%).
  • Real wage growth may be stronger than real spending growth.

Current Consumer Spending per Capita

Consumer spending per capita was Rs. 77,085 in 2017-18, the latest period reported by MoSPI. The largest spending category was groceries, representing Rs. 21,491 or 28% of total spend. Housing & utilities came in second with Rs. 13,293 (17%) and transportation ranked third at Rs. 12,333 (16%). Fully discretionary spending, including alcohol, tobacco & narcotics, restaurants & hotels and recreation & culture, comprised 5% of the average Indian's budget.

Consumer Spending per Capita 2017-2018. Consumer spending per capita in India was Rs. 77,085 in 2017-2018. Groceries comprised Rs. 21,491. Housing, which includes Utilities, Furnishings, Equipment and Maintenance, comprised Rs. 13,293. Transportation comprised Rs. 12,333. Clothing & Footwear comprised Rs. 5,485. Health comprised Rs. 3,774. Discretionary, which includes Alcohol, Tobacco & Narcotics, Restaurants & Hotels and Recreation & Culture comprised Rs. 3,765. Education comprised Rs. 3,292. Communication comprised Rs. 1,465. Miscellaneous, which includes Personal Care, Personal Effects, Insurance, Other Financial Services and Other Services, comprised Rs. 12,186.

Consumer Spending per Capita Since 2013

Since the 2013-2014 time period, the amount a typical Indian spends has grown fairly steadily at an average annual rate of 10%, from Rs. 52,086 to Rs. 77,085. It is important to note that these figures are not adjusted for inflation or income. The real growth rate is far more moderate, as we discuss later on.

Total Consumer Spending per Capita Since 2013-2014. Consumer spending per capita in India was Rs. 52,086 in 2013-2014, Rs. 57,472 in 2014-2015, Rs. 63,702 in 2015-2016, Rs. 70,557 in 2016-2017 and Rs. 77,085 in 2017-2018.

Groceries

Grocery has consistently been the largest spending category of a typical Indian's budget. However, at 7% average annual growth since 2013-2014, it has been one of the slower growth categories vs. others such as transportation (14% per year), health (17% per year) or education (14% per year). Notably, per capita grocery spend only increased by 1% in 2017-18. Overall, groceries as a percentage of total per capita spending has declined from 31.6% in 2013-14 to 27.9% in 2017-18.

Groceries Spending per Capita Since 2013-2014. Groceries spending per capita in India was Rs. 16,470 in 2013-2014, Rs. 17,744 in 2014-2015, Rs. 18,574 in 2015-2016, Rs. 21,268 in 2016-2017 and Rs. 21,491 in 2017-2018.

Housing & Utilities

Housing & utilities has consistently been the second largest per capita spending category in India but, similarly to groceries, has been growing relatively more slowly versus other categories. At 7% average annual growth, housing & utilities now comprises 17.2% of total per capita consumer spend, down from 19.3% in 2013-14.

Housing & Utilities Spending per Capita Since 2013-2014. Housing & Utilities spending per capita in India was Rs. 10,036 in 2013-2014, Rs. 10,907 in 2014-2015, Rs. 11,435 in 2015-2016, Rs. 12,179 in 2016-2017 and Rs. 13,293 in 2017-2018.

Transportation

Transportation has been one of the fastest growing per capita spending categories in India (14% on average since 2013-14) and now comprises 16.0% of total spend, up from 13.9% in 2013-14. If growth rates stay steady, transportation spend per capita will eclipse housing & utilities in the next two years.

Transportation Spending per Capita Since 2013-2014. Transportation spending per capita in India was Rs. 7,253 in 2013-2014, Rs. 7,928 in 2014-2015, Rs. 9,499 in 2015-2016, Rs. 10,634 in 2016-2017 and Rs. 12,333 in 2017-2018.

Fully Discretionary Spending

Of the spending categories broken out by MoSPI, three are arguably fully discretionary: alcohol, tobacco & narcotics, restaurants & hotels and recreation & culture. On the whole, discretionary spend per capita has been one of the slower growth categories, averaging an annual rate of 7%. It now comprises 4.9% of total per capita spending, down from 5.5% in 2013-14. Interestingly, alcohol, tobacco & narcotics is one of only two categories that Indians spent less on in 2017-18 than they did in the prior year (communication is the other). Before 2017-18, no category saw a decline in year-over-year spending during the five-year time frame we examined.

Fully Discretionary Spending per Capita in India 2013-2018

Discretionary Category2013-142014-152015-162016-172017-18
Alcohol, Tobacco & NarcoticsRs. 1,260Rs. 1,468Rs. 1,558Rs. 1,624Rs. 1,599
Restaurants & HotelsRs. 1,108Rs. 1,177Rs. 1,278Rs. 1,387Rs. 1,531
Recreation & CultureRs. 483Rs. 542Rs. 554Rs. 581Rs. 635
Source: MoSPI

Other Spending Categories

Clothing & footwear grew 10% on average annually from 2013-14 to 2017-18, and its 7.1% of total per person spending today is equal to its share in 2013-2014.

Health spend experienced the highest annual average growth (17%) from 2013-14 to 2017-18. The category now comprises 4.9% of total per capita spend, up from 3.8% during 2013-14.

Education was another high-growth category, increasing 14% on average annually from 2013-14 to 2017-2018. As a percentage of total, education grew from 3.7% to 4.3%.

Communication was a relatively low-growth category, increasing only 7% on average annually from 2013-14 to 2017-18. Its share of total per person spend shrunk from 2.2% to 1.9% over the period.

Miscellaneous, in which MoSPI groups personal care, financial services and other services, experienced high growth of 16% on average annually from 2013-14 to 2017-18. The general category now comprises 15.8% of total per capita consumer spend, up from 12.9% in 2013-14.

Other Spending per Capita in India 2013-2018

Category2013-142014-152015-162016-172017-18
Clothing & FootwearRs. 3,683Rs. 3,985Rs. 4,538Rs. 4,778Rs. 5,485
HealthRs. 1,989Rs. 2,370Rs. 2,725Rs. 3,143Rs. 3,774
EducationRs. 1,923Rs. 2,170Rs. 2,494Rs. 2,842Rs. 3,292
CommunicationRs. 1,136Rs. 1,420Rs. 1,471Rs. 1,500Rs. 1,465
MiscellaneousRs. 6,745Rs. 7,761Rs. 9,576Rs. 10,621Rs. 12,186
Source: MoSPI

Consumer Spending Relative to Inflation and Wage Growth

Examining average nominal spending over time can be useful in understanding how a given individual's actual spending has compared to that of an average Indian's. However, it is important to be mindful of inflation when assessing such economic metrics over time. While consumer spending per capita in India has grown 10% per year on average since 2013, inflation averaged close to 6% per year from 2013-2017 (according to the latest CPI data from the World Bank). Thus, as a back-of-the-envelope calculation, real consumer spending per capita has probably been closer to 4% per year on average.

As a final comparative data point, the International Labour Organisation estimates average real wage growth of 5.5% in India from 2008-2017, according to its Global Wage Report 2018/19. So, although the data for a perfect apples-to-apples comparison is not available, it would be promising for consumer financial health if wages are outpacing spending, on top of the relatively low level of debt in India.

Getting the Most Out of Spending

It can certainly seem that we spend a lot of money each year both on essential purchases as well as for our own personal enjoyment. Using a credit card to pay for daily purchases is the best way to get the most out of your spending due to the valuable rewards offered like cashback or airline miles. How much one can earn using a credit card depends on one's spending profile, but rewards could easily amount to thousands of rupees every year, which is essentially free money if you use your card responsibly.