Thread by @EACtoPM

Long-term consumption pattern of Indian households have changed significantly from 2011-12 to 2023-24. Particularly, expenditure on Durable Goods is increasing and ownership of key durable assets has become more widespread. Latest paper by @ShamikaRavi & Sindhuja Penumarty 1/9

Read full working paper here:
Key findings below⬇️2/9eacpm.gov.in/wp-content/upl…

Across the 3 components- Food Items, Consumable Goods and Services, and Durable Goods, the share of food has fallen to less than 50% in both urban & rural. Today, households allocate a greater share of their expenditure to non-food spending on consumables, and durable goods. 3/9

Share of MPCE (%) spent on Durable Goods has risen in both sectors, with the rural share slightly surpassing that of urban households in many states. In rupee values, spending has increased across all states and sectors, with higher absolute expenditure in urban households. 4/9

What are households spending on?
Within the Durable Goods category spending is shifting away from basic items like Clothing & Footwear towards asset-building expenditure on Personal Goods,and Cooking & Household Appliances. This is unfolding even in the bottom 40% households 5/9

Which Durable Goods do households own?
There is significant improvement in household asset ownership across states and sectors relative to the 2011-12 levels, most notably for four key durables- Motor Vehicles, Mobile Handsets, Televisions and Refrigerators. 6/9

A story of convergence: Across the four key assets, ownership gaps have narrowed significantly between the highest (Top 20% Households) and lowest (Bottom 40% Households) consumption classes. Convergence is stronger in urban areas with gaps narrowing more rapidly. 7/9

These findings show significant improvements in asset ownership throughout the country, including among the poorest or the bottom 40% of households across urban and rural areas. 8/9

Crucial policy implications- financial access & affordable credit expansion; public service delivery like roads, public transport, reliable electricity & piped water; adjustments to the estimation of inflation; and decisions on R&D, innovation and production goods & services. 9/9

Widening breadth of asset ownership across consumption classes: A greater proportion of households now own multi-asset categories in both sectors. Share of households not owning assets in any asset category is 5% or lower, signalling a reduction in asset poverty.