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Think about the last time you checked your monthly expenses. Rent, groceries, petrol, eating out, maybe a few subscriptions you forgot you were paying for. Now imagine doing the same exercise for a family in rural India. The list would look very different.
That difference is showing up in India’s inflation data too.
In July 2026, inflation in rural India was 4.84%, compared with 3.96% in urban India. Food inflation was even higher: 5.79% in rural India against 5.05% in cities.
But there’s another reason to look at how Indians spend their money right now. In February 2026, the government introduced a new Consumer Price Index with 2024 as its base year. The basket was rebuilt using the latest Household Consumption Expenditure Survey, and the number of items tracked increased from 299 to 358. It also added things that barely featured in the old basket, including OTT subscriptions, CNG, PNG and rural house rent.
And the spending data is pretty revealing.
An average rural Indian spent ₹4,122 a month in 2023-24, while the urban figure was ₹6,996. Food made up 47.04% of rural consumption expenditure, compared with 39.68% in urban India.
So if tomato prices jump, a rural household has a much bigger part of its monthly budget exposed to it. In a city, more money goes towards things like housing, transport and services.
There’s also been a quiet shift over the years. Food’s share of household spending has fallen from 59.4% of rural consumption in 1999-00 to 47.04% today. In urban India, it has fallen from 48.06% to 39.68%.
That’s what makes the new CPI basket interesting. It isn't just a new way of calculating inflation. It is a snapshot of how Indian households are changing.
We still spend a lot on food. But increasingly, what comes after the grocery bill matters too.
