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Food Consumption Expenditures and the COVID-19 Pandemic in India

The COVID-19 pandemic led to lockdowns and disruptions in food supply chains and emerged as both a demand- and a supply-side shock. Based on the Centre for Monitoring Indian Economy– Consumer Pyramids Household Survey monthly expenditure data for the period from January 2019 to August 2021, changes in food expenditure shares in India as a result of the pandemic across income and socio-economic and demographic groups are examined. The pandemic-induced lockdowns resulted in a sharp increase in the share of food in the total expenditure across rural and urban India for all income groups and castes and religions, but the intensity of shifts varied.

Food security exists when all people, at all times, have physical and economic access to sufficient safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life (World Food Summit, 1996 ).

Following SOFI (2021), well before the COVID-19 pandemic, the progress towards meeting the Sustainable Development Goal (SDG) Target 2.1 of ensuring access to safe, nutritious, and sufficient food for all people all year round or towards SDG Target 2.2 of eradicating all forms of malnutrition was not on track. The World Health Organization declared the COVID-19 outbreak a global pandemic in March 2020. As a result, several countries sealed their international borders and instituted various measures such as lockdowns, quarantines, and social distancing to flatten the curve of the infection. In addition to travel restrictions, there have been international trade restrictions, which, combined with widespread labour shortages, have resulted in massive economic turmoil and supply chain disruptions, threatening livelihoods and food consumption across the world.

India reported its first death due to COVID-19 on 13 March 2020, soon after which the Indian government sealed its international borders, suspended all visas to India, banned domestic travel by rail as well as air, and eventually announced a complete lockdown in the country (24 March 2020)1 to prevent community spread of the virus. Since March 2020, there has been a gradual, followed by a steep increase in both confirmed cases and deaths linked to the deadly virus. As the unlock phases began in June 2020,2 the number of confirmed cases and deaths also started increasing with the peak of the first wave recorded in September 2020, followed by a gradual decline in the trend. A fresh outbreak of COVID-19 struck the country in mid-April 2021 (the second wave), and the number of confirmed cases and deaths associated with the virus soon started rising again at an exponential rate; this time surpassing the peak of the first wave. The second wave subsided by August 2021.

Disruptions to the food systems due to the pandemic relate to both the production side (food production, processing, and distribution) and demand side (economic and physical access to food). On the production side (or the availability dimension of food security), the success of the food supply system is measured by its capacity to adapt to challenges such as COVID-19 (Devereux et al 2020; Reardon et al 2020) and provide a variety of food. But even if the food supply systems are resilient, the increased household food insecurity may have underlying explanations in reduced purchasing power due to the loss of employment and incomes. Rising food prices as a result of the pandemic also impacts the economic access to food as well as the deterioration in the nutritional status of vulnerable groups (Torero 2020; Kaicker et al 2021). Within countries, including the most developed, the impact of the pandemic on food security has also been varied across socio-economic groups (O’Hara and Toussaint 2021).

Further, household food consumption may be resilient only due to the substitution of non-food consumption by food or the substitution of more expensive sources of calories such as fruits, vegetables, dairy products, and meat by cheaper sources of calories such as cereals. Price-induced substitutions are typically confined to substitutions within food categories, for example, between inferior and good-quality rice (Subramanian and Deaton 1996). However, when the price and income shocks are massive, sacrificing other essentials to maintain a subsistence food consumption is not unlikely (Gaiha et al 2014a). In this article, we draw interesting insights into the impact of the COVID-19 pandemic on the food expenditure shares in India.

Data and Methodology

We use the data on monthly household expenditures on food, incomes, and other household demographic and socio-economic characteristics from the Centre for Monitoring Indian Economy–Consumer Pyramids Household Survey (CMIE–CPHS) over the period from January 2019 to August 2021. The CPHS is a continuous survey administered on a panel of sample households by the CMIE. It delivers fast-frequency data on consumption expenditure of households collected thrice every year. The CPHS provides a detailed break-up of the monthly consumption expenses as well as incomes and its composition by source for a sample of Indian households.

This income and consumption data at the household level along with the demographic (caste and religion) and spatial characteristics (location—rural or urban) are used to examine the trends and heterogeneity among various groups in food shares (that is household expenditure on food as a share of the total household expenditure) and the share of staples in food composition (that is, household expenditure on cereals as a percentage of the total food expenditure) in India.

According to Ernst Engel (1857), “the poorer a family, the greater the proportion of its total expenditure that must be devoted to the provision of food” implies that the food Engel curve—a graph showing the relationship between the household expenditure on a particular good or service and the varying levels of household income—is downward sloping. In the present study, we examine the shifts in food Engel curves in India during the period from January 2019 to August 2021 and identify possible explanations for the varying degrees of shifts across income and social groups.

Results

Food expenditure shares and food Engel curves in India: The pandemic-induced lockdowns resulted in a sharp increase in the share of food in the total expenditure across rural and urban India and for all income levels. The share of food in the total expenditure for rural India ranged from 45% to 50% and for urban India from 41% to 45% in the 14 months preceding March 2020. However, this figure rose to 61% for rural India and 59% for urban India in April 2020, the period coinciding with the strict nationwide lockdown. The movement restrictions at the onset of the pandemic acted more like a temporary shock than a permanent one, which resulted in the declining shares of food in the total expenditure, but stabilising at a level higher than that observed pre-pandemic. Figure 1 shows the share of food in the total expenditure in rural and urban India from January 2019 to August 2021. A slight increase was also observed during the more deadly second wave where some states used closures and containments as measures to control the spread of COVID-19, but no nationwide restrictions were imposed.

This phenomenon is seen for households across income levels. Figure 2 plots the Engel curves for rural and urban India for January 2020 (pre-pandemic), April 2020 (nationwide lockdown), August 2020 (two months after the reopening), and August 2021 (after subsiding of the second wave).

The upward shift in Engel curves between January and April 2020 is witnessed not only in rural but also in urban areas across income deciles. In urban areas, the gap in food expenditure share between January 2020 and April 2020 was narrower for lower income deciles and wider for higher income deciles. This may partly be attributed to higher expenditure on food sourced from outside, ready-to-cook/eat meals, and consumption of more expensive foods as people worked from home. In rural areas, the gap between January and April 2020 was highest for the lowest decile, with narrowing down for middle deciles and widening at higher deciles. That the poorest in rural areas were worst-affected by the lockdown is not surprising.

The Engel curve shifted downward between April and August 2020 once the lockdown restrictions were removed. In rural areas, the shift was maximum for the poorest as well as the higher deciles, suggesting the resilience of household consumption of food to shocks. There was a further downward shift in the subsequent 12 months; however, the curve remained above the pre-pandemic levels even after the more deadly second wave had subsided.

Heterogeneity in food expenditure shares among socio-economic groups: The caste-based inequality in India exists not only in terms of income and wealth but also household food consumption patterns. Considerable caste-related disparities exist in Indian diets that further lead to disparities in nutrition levels among different social groups. Our analysis reveals that the pandemic-induced lockdowns resulted in a sharp increase in the share of food in the total expenditure across rural and urban India and for all social groups, although at different intensities or rates.

Figures 3 and 4 show the share of food in the total expenditure for different social groups in rural and urban India from January 2019 to August 2021. For the rural Scheduled Caste (SC) households, the share of food in the total expenditure ranged from 48% to 54% before March 2020. However, this figure rose to 64% in April 2020, the time of stringent nationwide lockdown. A similar sharp upsurge was observed in urban SC households during the same period when the figure climbed to 61%. Similar movement was observed among other social groups, namely the Other Backward Classes (OBCs), Scheduled Tribes (STs), and Unreserved3 Category in both rural and urban areas. Before March 2020, the share of food expenditure of the OBCs, STs, and Unreserved Categories in rural areas ranged from 45% to 52%, which increased to 61%, 60%, and 59%, respectively, in April 2020. The urban OBCs, STs, and Unreserved Category households saw an increase in food share in the total expenditure up to 60%, 60%, and 58%, respectively, during the lockdown.

While all households, irrespective of the social group they belonged to, showed a parallel upward movement of food expenditure share at the onset of the pandemic, there were substantial differences between the levels of rise. In rural areas, the sharpest increase in food expenditure shares was exhibited by the lower castes, that is, the STs and SCs, with an increase in household food expenditure share of about 19% and 18%, respectively, in April 2020, relative to the previous month. In contrast, the OBCs and Unreserved Category showed lower increases. Interestingly, the results are reversed in urban areas—the increase in food expenditure share is higher for the OBCs and the Unreserved Category households compared to the ST and SC households. A reason behind the contrasting results in rural and urban India could be the shift of expenditure in urban areas by the upper castes to home-cooked food from food sourced from outside, ready-to-cook/eat meals, a change in lifestyle due to lockdown, and the rising fear of the pandemic.

During the peak of the first wave in India, that is, September 2020, the food expenditure shares kept declining for all households in urban India due to continued relaxation of the lockdown restrictions by the government in a phased manner. However, at the same time, the lower castes in rural India, that is, the SCs and STs responded differently by increasing their food expenditure shares even when the economy was continually being opened. As the second wave peaked in May 2021, the same trend of increasing food expenditures of households with strict lockdowns was observed, followed by declines as the restrictions were relaxed. However, the upsurges and drops were much lower than those seen during the first lockdown. This may be partly attributed to the fact that the nationwide lockdown at this time was not as stringent, and states had the autonomy to implement closures and containments in their jurisdiction. Hence, while the households in rural and urban areas had analogous trends in food expenditure shares, large variations could be seen between different social groups.

Heterogeneity in food expenditure shares among religious groups: Religion has a major impact on consumer choices and is evident in the Indian context as well. Religion and religious beliefs play a major role in food consumption patterns as well as in the food consumption choices of Indian households. Our analysis reveals that the various religious groups across India also observed a sharp increase in the share of food expenditures during the nationwide lockdown both in rural and urban areas but the burden was disproportionate.

Figures 5 and 6 show the share of food in the total expenditure for different religious groups in rural and urban India from January 2019 to August 2021. The Muslim households had the highest food expenditure shares, ranging from 51% to 58% in rural areas and 45% to 52% in urban areas before March 2020. These shares increased to 65% and 62% in rural and urban areas, respectively, in April 2020. The share of food in the total expenditure ranged from 46% to 52% before March 2020 for Hindu rural households and 41% to 49% for Hindu urban households. The figures reached as high as 61% and 59% in April 2020, respectively. An interesting observation is that the share of food in the total expenditure for Sikh households is the lowest among all the religious groups. During the lockdown, it peaked at 56% and 59% for rural and urban households, respectively. While the other religious groups showed an increase in food expenditure even during the second wave, there were minor differences in Sikh households in rural India. The Christian households in rural areas had food expenditure shares from 42% to 48%, and 40% to 47% in urban areas before March 2020, which rose to 60% and 58%, respectively, during the lockdown.

 

As seen in the case of social groups, the changes in food expenditure share were different for different religious groups as well. The steepest increase in food expenditure share in April 2020 was shown by Christians (25%) in rural areas and Sikhs (30%) in urban areas. Muslims households showed a relatively low increase, but in absolute terms, their food expenditure shares remained the highest.

The locational differences (rural and urban) exist even among religious groups. The increases are higher in urban India, almost double of that in rural areas, which may be due to different lifestyles and practices of people in urban areas, for instance, higher expenditure on meals sourced from outside and ready-to-eat/cook meals. The differences may also be due to variations in the incidence of COVID-19 infections in rural and urban areas. At the onset of the pandemic, urban areas were hit harder than rural areas in terms of infections, which may have led to greater shifts in food expenditure in urban households. It is indeed striking that after the relaxation of lockdowns and moderation of COVID-19 cases in August 2021, the food shares have come down gradually. But they are not yet down to the pre-pandemic levels for all social groups and religions.

Share of staples in food consumption basket in India: We examine the trends in the share of food expenditure on cereals as a measure of diet composition. A general trend—declining share of food expenditure on cereals—is observed in both rural and urban India (Figure 7, p 20), consistent with the extant literature on dietary transition and dietary diversification (Kaicker et al 2018). Two interesting results emerge on careful examination of Figure 7. First, while the urban trend of decline is relatively smooth, the rural trend shows sudden jumps, and the three peaks observed in the rural graph after the onset of the COVID-19 pandemic in India coincide with the nationwide lockdown—the peaks of the first and second waves. Second, there is a sharp reduction in the share post the nationwide lockdown in March—April 2020 in urban India and no reversal to the previous or the pre-pandemic levels. Relative prices of cereals to other food items, greater consciousness among people to consume diets rich in micronutrients, proteins (such as dairy products, fruits, vegetables, and meats), and lifestyle changes may provide possible explanations for these shifts. These findings are consistent across all social groups and religions, except Sikh households where the trend is smoother and a major bump is only seen during the first lockdown.

Figure 8 shows the shares of cereals in the total food expenditure in rural and urban India by income deciles for the periods January 2020, April 2020, August 2020, and August 2021.

A shift from non-cereals to cereals during the nationwide lockdown in March–April 2020 was prominent for the higher income deciles but not for the lower deciles. This could be due to the relative price increases of non-cereals with respect to cereals. The supply chain disruptions had a more severe impact on the prices of perishables such as fruits and vegetables. But these explanations are largely conjectural, and an examination of consumption in quantity (and not so much consumption expenditures of food composition) may better explain how the diets and nutrition changed during the pandemic. Thus, while there is conclusive evidence on food supply disruptions restricting the availability and food shares depicting changes in access, nothing definitive could be said about the utilisation of food in the absence of private food stock data.

A declining trend in monthly household consumption expenditures on cereals (as a share of the total food expenditure) is witnessed across all expenditure deciles except the highest. That there has been a long-term decline in cereal consumption preceding the pre-pandemic period has been discussed in considerable detail in Subramanian and Deaton (1996) and Gaiha et al (2014b) and must be borne in mind while interpreting these findings.

Conclusions

India’s food markets have been significantly affected by the spread of the COVID-19, facing both demand and supply shocks. These shocks impacted the quantities of food available at wholesale and retail markets and the prices at which it sold in these markets. This combined with the income and employment shocks and lifestyle changes has affected food consumption patterns across sectors and socio-economic and demographic groups. Our study examines the trends in food expenditure shares in India pre and post the announcement of lockdowns by the government to reduce the spread of COVID-19 infections and mainly during the course of the first and second waves of the pandemic.

The pandemic-induced lockdowns resulted in a sharp increase in the share of food in total expenditure across rural and urban India (in April 2020). The movement restrictions at the onset of the pandemic acted more like a temporary shock than a permanent one, which resulted in the declining shares of food in the total expenditure once the lockdown restrictions were lifted (June 2020 onwards). Slight increases occurred during the more deadly second wave too (April–May 2021) where some states used closures and containments as measures to control the spread of COVID-19, but no nationwide restrictions were imposed. However, the food expenditure shares remained above the pre-pandemic levels even after the more deadly second wave had subsided.

This phenomenon is observed among households across income levels as well as all social and religious groups, but the intensity of shifts varied. In urban areas, the shift in food expenditure share due to the nationwide lockdown in April 2020 was narrower for lower income deciles and wider for higher income deciles—partly attributable to higher expenditure on food sourced from outside, and ready-to-eat/cook meals, and the consumption of more expensive foods as people worked from home. In rural areas, the shift was highest for the lowest decile and for the lower castes (the SCs and STs), suggesting that the poorest in rural areas were worst-affected by the lockdown is not surprising.

A general trend—the declining share of food expenditure on cereals—is observed in both rural and urban India. However, while the urban trend of decline is relatively smooth, the rural trend shows sudden jumps, and the three peaks observed in the rural areas after the onset of the COVID-19 pandemic coincide with the nationwide lockdown (April 2020), the peak of the first wave (November 2020), and that of the second wave (April 2021). Further, there is a sharp reduction in these shares after the second wave had subsided in August 2021 in urban India, but no reversal to the pre-pandemic levels. Evidently, income levels did not fully recover and changes in relative food prices induced substitutions in the consumption basket.

Spurts of higher food expenditure shares are alarming as inferior cereals are substituted for expensive cereals; lower amounts are spent on more nourishing foods such as fruits and vegetables; and other essential non-food items such as education and healthcare are neglected. The disproportionate burden of the pandemic-induced lockdowns and the consequent food insecurity, particularly among the disadvantaged and minorities, calls for greater action on the part of policymakers to boost aggregate demand, especially among the deprived. Unfortunately, the Budget 2022–23 does not inspire confidence in the National Democratic Alliance’s sensitivity to this concern and prompt action. While social protection schemes are slashed—food subsidy and the Mahatma Gandhi National Rural Employment Guarantee Act, 2005—the will-o’-the-wisp of growth acceleration through higher investment is chased in the denial of deficiency of aggregate demand.

Notes

1 The first lockdown (phase 1) spanned a period of 21 days from 25 March to 14 April 2020 in which nearly all factories and services were suspended, barring “essential services.” The second lockdown (phase 2) started on 15 April and continued until 3 May 2020, with conditional relaxations in regions where the COVID-19 spread had been contained. With additional relaxations, the third phase of the lockdown (phase 3) was from 4 May to 17 May, and the fourth phase (phase 4) from 18 May to 30 May.

2 Unlock 1.0 (1–30 June 2020), 2.0 (1–31 July 2020), and 3.0 (1–31 August 2020) involved phased reopening in stages, with an economic focus where shopping malls, hotels, and restaurants reopened. Unlock 4.0 (1–30 September 2020) was characterised by permissions of gathering at marriages/funerals, while wearing face masks became compulsory in public places, and subsequently (Unlock 5.0, beginning 1 October 2020) by opening cinemas and a gradual restarting of onsite teaching at schools at the discretion of state governments.

3 Unreserved Category includes upper castes and intermediate castes that do not identify as the OBCs, SCs, or STs. A disaggregation of the Unreserved Category into Brahmins and other upper or intermediate castes has not been done.

References

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Gaiha, Raghav, Raghbendra Jha and Vani S Kulkarni (2014): Diets, Malnutrition, and Disease: The Indian Experience, India: Oxford University Press.

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Updated On : 8th Aug, 2022
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