Spending patterns
Household Expenses witness a notable uptick, with an average increase of 6%. In households with more than one earning member, the chief wage earner (CWE) contributes ~80% of the total household expenses, while non-CWE contributes ~20%. In the study, 42% of the women are CWE in their respective households.
For an average lower middle-class Indian, grocery (26%) and rent (21%) are the primary expenses. This is followed by commute (19%), children’s education (15%), medical expenses (7%), electricity bills (6%), cooking gas (4%), and mobile bills (2%).
In terms of discretionary spending, various demographic groups exhibit different spending habits. Chennai stands out for local travel/sightseeing (59%), dining out (54%), and watching movies (55%) compared to other cities. Lucknow spends the least on local travel/sightseeing (17%) and dining out (14%). Chennai also has the highest rent costs (29%), while Kolkata and Jaipur have the lowest (15%). Ahmedabad and Dehradun allocate the least to fitness (1%).
Bengaluru and Kochi spends the most on children’s education (23%). Dehradun tops in medical expenses (13%) but spends the least on children’s education (10%).
Household Savings
In terms of savings, ~60% of consumers prioritise building a cash reserve to address emergency expenses after covering their monthly fixed expenses. According to the study, Men (62%) outpace Women (50%) in savings. Similarly, Gen Z (68%) demonstrates a stronger inclination towards savings than Millennials (62%) and Gen X (53%). Regionally, consumers from the East exhibits higher savings rates (63%) compared to those from the West (61%), South (59%), and North (59%). Furthermore, metros led in savings, with 62% of urban consumers prioritising savings over Tier 1 (61%) and Tier 2 (54%) cities.
UPI usage
On digital transactions, the study shows UPI (Unified Payments Interface) remains a focal point, warranting heightened vigilance and security measures to mitigate the risk of financial fraud. The study indicates that 72% are current users of UPI, with most usage among men, Gen Z, and metro residents. Notably, UPI usage is the highest in Chennai (90%) and lowest in Ahmedabad (58%).
Furthermore, the study shows that 42% of consumers, especially men, Gen Z and Tier 1 consumers, expressed interest towards using Credit on UPI. Interestingly, the reasons to use “Credit on UPI” includes reduced timeframe in taking loans (53%), ease of payments at retail stores (44%), probability of getting better offers (23%), and lesser charges (16%).