According to a new report, the Indian insurance sector has grown rapidly over the last two decades, and the government’s decision to allow 100% foreign direct investment (FDI) in the sector would accelerate growth by attracting significant foreign capital and boosting innovation.

As private spending increases in India, earning individuals across all city tiers are allocating more than 33% of their income (on average) to loan EMIs, according to a survey released. According to a survey by B2B fintech company Perfios and PwC India, people spend the most money on mandatory expenses, accounting for 39% of their total spending, followed by essential expenses (32%), and discretionary expenses (29%).

According to the statistics, more than 62 percent of discretionary spending go into lifestyle products, such as clothing and personal care items. As salaries rise from entry-level to high-income earners, so do the amount and frequency of food expenditures (ordering or eating out).

The average total amount spent on housing rent in tier 2 cities is 4.5% higher than in tier 1 cities, according to the research. People in tier 2 cities spend the most on medical expenses, paying 20% more per month than those in tier 1 cities. According to the survey, the average person in a Tier 1 city spends approximately Rs 2,450 per month on medical expenses, while metro inhabitants pay the least, at Rs 2,048 per month.

“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,” stated Sabyasachi Goswami is the CEO of Perfios Software Solutions, a leading SaaS-based fintech company.

According to Mihir Gandhi, Partner and Leader-Payments Transformation at PwC India, the research is intended to assist businesses, governments, and financial institutions in understanding changing consumer behaviour and making educated decisions in a dynamic environment. The survey looked at the spending habits of 30 lakh tech-savvy individuals from throughout the country.

The research concluded with recommendations for compliance changes, such as a strong compliance culture led by firm leadership, technology-driven solutions to automate compliance processes, and the implementation of data security measures to increase consumer trust.