As the Narendra Modi-led government approaches an election year, the share of Indians feeling confident about the economy has dropped drastically.
This year, just 56% of those surveyed by leading American think tank Pew Research Center said the current situation of the economy is good, down from 83% in 2017. The 27-percentage-point decline was the steepest fall recorded among the 27 countries studied for Pew’s Spring 2018 Global Attitudes survey. In India, the organisation interviewed 2,521 adults between May 23 and July 23 this year.
Respondents who say the current economic situation is good:
The report found that in 20 countries, including India, those who support the governing party were more likely to say that the current economic situation was good, indicating how economic perceptions are filtered through a partisan lens, Bruce Stokes, director of Global Economic Attitudes at Pew, writes in the report. In India, 72% of those respondents who supported the governing party believed the current economic situation was good, while among those who did not the figure was 48%.
Nevertheless, 66% of the total respondents in India also said they believed children would grow up to be financially better off than their parents.
“Indian GDP per capita has increased 266% since 1990, and such good fortune in about a generation may explain why two-thirds of adults (66%) believe young Indians will grow up to be better off financially than their parents,” Stokes writes.
The results of the survey come amidst a number of economic crises in India. For one, the rupee now ranks among Asia’s worst-performing currencies, having lost 11% of its value against the US dollar this year. Dragged down by rising crude oil prices, a widening current account deficit, and the effects of trade wars spurred by US president Donald Trump, India’s currency has shown little sign of recovery, though the government has launched efforts to stem the slide.
Related to this is India’s fuel price crisis. Petrol prices are hovering near or above the Rs90-per-litre mark in many cities, and diesel prices have also surged this year. While some state governments have offered relief by cutting prices, the central government has so far avoided reducing the excise duty, which, together with other taxes and commissions, accounts for almost 50% of fuel prices in India.
All this comes after mounting concerns over job creation in India, which is expected to have the largest working-age population in the world by 2027. While a heated debate continues over how many jobs have actually been created in Modi’s tenure, several key sectors, including agriculture, have struggled in recent years, sparking fears of India’s demographic dividend soon turning into a disaster.
But Indians are almost overwhelmingly convinced that things are better than they used to be.
Up to 65% of the respondents in the survey said the financial condition of average Indians had improved from 20 years ago, far more than the proportion recorded in all the advanced economies, including the US, UK, and Japan.