Last Updated:
At least 42 per cent plan to make discretionary purchases of products like vehicles, electronics, jewellery, home improvements, and fashion.
Rising costs of essentials like food, housing, education, and healthcare have left nearly half of Indian households with little room for discretionary spending. (Image: PTI)
Despite a rebound in private consumption driving India’s economic growth in FY 2024-25, a new consumer survey reveals a deepening divide in household spending patterns. The LocalCircles survey, which gathered responses from over 9,000 households across 304 districts, found that 49 per cent of Indian households plan to spend only on essentials in the next six months with a squeezing budget, while 51 per cent intend to make discretionary purchases.
India’s GDP grew by 6.5 per cent in FY 2024-25, with private consumption regaining momentum, growing at 7.2 per cent compared to 5.6 per cent the previous year. However, government and capital expenditures showed signs of slowing. Experts attribute the consumption-led recovery to rural resilience, improved agricultural output, and tax incentives targeted at the middle class.
The Reserve Bank of India anticipates stable consumer confidence in the short term and improvement over the next year, aided by expected inflation easing and income tax benefits introduced in the 2025 Union Budget. These benefits include tax exemptions for incomes up to Rs 12 lakh under new tax regime, aimed at boosting disposable incomes, especially among India’s growing middle class and Gen Z workforce.
However, economic pressures remain. Rising costs of essentials like food, housing, education, and healthcare have left nearly half of Indian households with little room for discretionary spending. According to the survey, 49 per cent of respondents will spend Rs 50,000 or more only on essentials such as groceries, medicines, and utility bills.
Among the remaining 51 per cent, spending priorities vary. At least 42 per cent plan to make discretionary purchases of products like vehicles, electronics, jewellery, home improvements, and fashion, while 27 per cent expect to spend on services including travel, entertainment, dining out, and educational services. Only 18 per cent indicated they would spend on both discretionary products and services.
The income gap remains a major factor in this divide. While some households benefit from recent fiscal reliefs and a growing economy, others continue to struggle under inflationary pressure.
The survey received over 9,000 responses from household consumers located in 304 districts of India. While 62 per cent respondents were men, 38 per cent respondents were women. A total of 42 per cent respondents were from tier 1, 27 per cent from tier 2 and 31 per cent respondents were from tier 3 and 4 districts.
LocalCircles is a community social media platform which enables citizens and small businesses to escalate issues for policy and enforcement interventions and enables the Government to make policies that are citizen and small business centric.
- First Published:
