Moving towards sustainable development? Social, environmental implications of HCES data

By Dr Vandana Sehgal, Dr Amandeep Kaur* 
Sustainable development, the high time agenda, encompasses economic, social, and environmental dimensions, aiming for a balance between all these aspects to ensure long-term well-being and prosperity for all. One of the crucial aspects of sustainable development is consumption patterns. Consumption patterns refer to the way individuals, households, and societies use resources and goods. Sustainable consumption patterns entail using resources efficiently, minimizing waste, and considering the environmental and social impacts of consumption choices.
Amid the direction to approach towards the sustainable ways of production and consumption, the recent data of Household Consumption Expenditure Survey (HCES) 2022-23 published by the Ministry of Statistics and Programme Implementation, presents some surprising facts of unsustainable consumption behaviour in India. The data presents a compelling narrative of societal transformation taking place across both rural and urban landscapes. As we delve into the data, we notice two distinct trends: Firstly, there's a noticeable increase in consumption levels both in rural and urban areas, and secondly, and perhaps most importantly, we observe a subtle change in the preferences for goods and services.
The level of household consumption expenditure, as measured by average Monthly Per Capita Consumption Expenditure (MPCE), has been estimated to be Rs. 3,773 and Rs. 6,459 during 2022-23 for rural and urban India respectively as compared to Rs. 1430 and Rs. 2630 for the year 2011-12. Since decades, urban India has exhibited a higher share of consumer expenditure on non-food items (refer Figure1). However, for the first time, a notable shift in consumption pattern of rural India with increased consumption of non-food items (53.62%) than consumption of food items (46.38%) has been observed.

As we explore the state-specific data, the same consumption pattern between rural and urban populations has been observed. Expenditure on non-food items consistently surpasses that on food items across almost all states in both rural as well as urban areas.
Kerala has the lowest share of food expenditure in both rural (39.1%) and urban areas (36.01%), indicating higher spending on non-food items. High income states like Maharashtra, Karnataka, and Tamil Nadu have also lower percentages of food expenditure. Urban areas in these states spend around 63-64% on non-food items, indicating higher disposable incomes and an inclination towards varied expenditures beyond basic necessities. Maharashtra, for instance, shows that rural areas spend 59.11% on non-food items, while urban areas spend 62.68% (Table-1).

Conversely, low-income states such as Bihar, Uttar Pradesh, and Odisha also follow this trend, though with less stark differences. In Bihar, rural areas allocate 46.45% to non-food items, whereas urban areas allocate 52.63%. This pattern suggests that even in less affluent states, there is a significant shift towards non-food expenditures, driven by urbanization and economic changes. Overall, this data highlights a nationwide trend where non-food expenditure surpasses food expenditure across various states, reflecting evolving economic conditions and consumption preferences (Table-1).

The HCES (2022-23) data trends certainly offer some food for thought in form of the following queries:

1. Does the consumption data confirm the applicability of the Engel curve?

Engel's law states that with an increase in income of a country, the consumption expenditure allocated to food items forms a smaller share of income thereby an indication of their increased financial well-being and affluence.
Overall, the consumption data provides empirical evidence supporting the Engel curve's predictions regarding how household expenditure patterns change with income levels, urbanization, and economic development. The data, especially from high-income states, supports this concept by demonstrating a relatively larger increase in non-food expenditure compared to food expenditure as incomes rise (refer Table 1). In high-income states like Maharashtra, Karnataka and Tamil Nadu, where disposable incomes are relatively higher, the consumption pattern aligns with the Engel curve's principle. The rising income levels reflects the evolving nature of household expenditure patterns with a decreasing share of income allocated to necessities like food and an increasing share devoted to non-food items.
However, the change in consumption pattern may follow the Engel's law indicating the shift to non-food consumption with increase in income; but this shift is not leading towards sustainability.

2. Where do changing lifestyle patterns lead us?

Taking a closer examination of the HCES data, a concerning shift in consumption pattern, marked by a move away from traditional staples like cereals towards a more diverse range of processed food items has been observed (refer Table-1, Figure 2).

Exploring state specific data, there is a noticeable trend of higher consumption of Beverages and Processed Food (BPF) and Egg, fish and Meat (EFM) products in urban areas compared to rural areas. This disparity could be attributed to factors such as greater availability and accessibility of processed foods in urban centers, higher purchasing power, and changing lifestyle preferences favoring convenience foods among urban populations. Interestingly, states like Bihar and Chhattisgarh show relatively lower consumption of BPF and EFM, especially in rural areas. This may reflect traditional dietary habits or limited access to processed foods in these regions.
While the expenditure on processed foods is notably higher in urban areas, it is not confined to urban areas only. HCES data provide evidence of this growing trend pervading in rural communities as well. The consumption expenditure on the category of ‘Beverages and Processed Food’ commands the highest share amongst the category of food items. The proportion spent on this segment is even more than the cereal and cereal substitutes. It clearly indicates a growing reliance on processed food items across the rural as well urban landscape. This shift can be attributed to various factors, including changing lifestyles, increased urbanization, and the appeal of convenience associated with processed foods. Following this lifestyle, it can be difficult to move towards a circular economy model, where products and materials are reused, repaired, remanufactured, and recycled, can help minimize waste and resource depletion.
Further, it is also crucial to highlight that in non-food category, the consumption of durable items occupies a second highest share in urban (7.17%) and third largest share in rural (6.89%) consumption expenditure (refer Figure 3). This trend spanning both rural and urban segments of the economy clearly signifies the changing spending behaviour of the households towards leading a comfortable lifestyle pattern as well as a broader societal transformation in general.

Despite the fact that processed food offers convenience and enhanced shelf life, the ill effects of packaged food cannot be ignored. The impact of this trend is not only limited to mere dietary preferences; but it also poses significant health risks to individuals nationwide. This trend has important macroeconomic implications of contributing towards unsustainable consumption patterns as well as impacting the quality of our demographic dividend. Our sustainable development depends on having a strong demographic dividend, i.e., economic growth potential provided by a large working-age population. This trend represents considerable health hazards, which may cause lower productivity and slow pace at which economy moves forward. We should not forget that sustainable consumption habits are vital for achieving the sustainable development goals. The changing consumption pattern may reflect economic development but it has its social and environmental implications which may lead us away from the sustainable development.
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*Assistant Professors, Jaypee Institute of Information Technology, Noida