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Change in spending habits

The spending patterns and lifestyle of people in India are changing rapidly. A new report released by Kotak Mutual Fund, titled ‘The Great Consumption Shift’ reflects this change. According to the report, now the monthly budget of households is not the same as before. People are spending less part of their income on food items and ration. Instead, their money is being spent more on things like mobile data, internet entertainment (OTT platforms), expensive smartphones, live shows and foreign travel. As income is increasing, people are focusing on improving their lifestyle.

reduction in food expenses

Between 1999-00 to 2022-23, expenditure on grains in villages has declined from 22% to only 5%. Similarly, in cities it has come down from 12% to 4%. Talking about total food expenditure, in villages it has come down from 59% to 46%, while in cities it has come down from 48% to 39%. Now people in cities are using their money on other things, like spending on mobile has increased by 3.6%.

Increasing expenditure on entertainment and travel

Interest in traveling abroad is increasing among people. Spending on foreign travel has increased by approximately 450% in the last eight years. In the first two months of the financial year 2026 alone, people spent about Rs 1.45 lakh crore on foreign travel. This amount is so huge that it is more than the entire building material industry of the country. People are now also investing in foreign stock markets and debt funds.

trend of expensive smartphones

There has not been any significant growth in the sales of mobile phones in India, but people are now showing interest in buying expensive phones instead of cheap phones. Between 2020 to 2025, the market share of premium phones above Rs 30,000 is expected to increase from 20% to 26%. The biggest beneficiary of this change has been the Apple company, whose income has increased by 47% every year.

Increasing threat of online fraud

With changing habits, online fraud is also on the rise. In the last six years, people have lost around Rs 53,000 crore to online fraud. This amount is so huge that it can affect the entire branded restaurant industry of the country.

Ways to avoid financial loss

To avoid this increasing economic pressure, people need to improve their financial habits. One should avoid buying things on loan or EMI without thinking. Instead, safe investment options should be selected. Digital fraud can be avoided by being careful in online transactions and staying away from unknown links.