ALL IS NOT WELL

In charts: From employment to inflation, Indians are unhappy

India’s consumer sentiment is damp at best.
India’s consumer sentiment is damp at best.
Image: Reuters/Danish Siddiqui
By
We may earn a commission from links on this page.

One year before the next general election, Indian consumers feel they are worse off than they were 17 months ago on all counts—from the economy to employment and inflation.

A Reserve Bank of India (RBI) survey released last week shows that current perceptions on the general economic situation have dived sharply from the last round three months ago. For instance, 41.8% of those surveyed said the economy has worsened. The number of people who find the economy worse off is sharply higher than even in December 2016, at the peak of the post-demonetisation pain.

The RBI survey involved 5,297 households across Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, and New Delhi.

However, over half of the consumers surveyed remain hopeful that the economy will remain the same or improve in the next one year, compared to 45.6% in the last round.

Respondents were far more pessimistic about employment, the Modi government’s Achilles heel.

The proportion of people who felt that things had worsened on this front has remained consistently over 40% in the last four surveys since September 2017. Looking forward, over half of them believe employment will either stay the same or worsen over the next one year.

And as expected, amid a slower economy and fewer jobs, prices are pinching consumers. Nearly 80% of those surveyed feel the rate of inflation has increased, and just as many believe it will only worsen.

So, there may be precious little time for the Modi government to decisively turn the economy around. Even if there are chances of a recovery, there are also global risks, too, like a China-US trade war or a spike in crude oil prices.