Bengaluru, Feb 19 (IANS): As private consumption surges in India, earning individuals across all city tiers are allocating more than 33 per cent of their income (on average) towards paying loan EMIs, a report showed on Wednesday.

People spend the highest amount of money on their obligatory expenditures, which accounts for 39 per cent of their total spending, followed by 32 per cent for necessity expenditures and 29 per cent for discretionary expenditures, according to the report by B2B fintech company Perfios and PwC India.

The findings showed that more than 62 per cent of discretionary expenditures are allocated towards lifestyle purchases, which include shopping for fashion and personal care items.

As the salary increases from entry-level earners to high-income earners, both the amount of money spent on food expenditure (ordering or eating out) and the frequency at which it is spent increase.

Average total amount spent on house rent is 4.5 per cent higher in tier 2 cities than it is in tier 1 cities, the report found.

People in tier 2 cities spend the most on medical expenses, averaging 20 per cent more per month than those in tier 1 cities.

A person in a tier 1 city spends nearly Rs 2,450 per month on medical expenses on average, while metro residents have the lowest average expenditure at Rs 2,048 per month, said the report.

“India’s consumer market is undergoing a transformation which is fuelled by the rising middle class, expanding rural markets and a digitally connected, aspirational population,” said Sabyasachi Goswami, CEO, Perfios

According to Mihir Gandhi, Partner and Leader-Payments Transformation, PwC India, the report is designed to help businesses, policymakers, and financial institutions understand evolving consumer behaviour and make informed decisions in a dynamic marketplace.

The report examined the spending behaviour of 30 lakh tech-savvy consumers from across the country.