RBI consumer sentiment survey shows bleak economic and employment prospects ahead

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MUMBAI: The latest version of the consumer sentiment survey conducted by Reserve Bank of India (RBI) presents a gloomy picture on consumer confidence and employment.

The survey conducted in 13 major cities and seven state capitals shows sentiment for the overall economy and employment declined to a six-year low in September and people were less optimistic about their income over the year ahead.

According to the data, the Current Situation Index (CCI) fell to 89.4 in September from 95.7 recorded in July. It had touched 88 in September 2013.

The cities covered by the survey included Delhi, Mumbai, Kolkata, Chennai, Bangalore and Hyderabad and state capitals Bhopal, Guwahati, Jaipur, Lucknow, Patna and Thiruvananthapuram. It polled 5,192 households.

The survey shows for the first time ever since September 2012, when this index was introduced, a majority of respondents (52.5%) felt the employment situation had worsened. As for the coming year, 33.4% said the situation would only get worse, again the highest proportion ever voicing this feeling.

About their own income, the TOI report said that 26.7% said it had decreased. Only once before, in November 2017, had a higher proportion of respondents (28%) perceived their income as having dropped.

On the overall economic situation, almost half (47.9%) of the households surveyed felt it had worsened. More than 31 per cent felt the situation will only worsen further in the coming year. The survey showed while sentiment for overall spending, primarily on essentials, remains strong, that for discretionary spending such as on consumer durables, travel, or even eating out weakened is low in September.

For the first time, 26% of those polled said their spending on non-essentials would go down in the coming year. The proportion of those reporting that their spending on non-essential items had gone down or had remained the same is the highest since Sep 2015, from which month this data is available.

This is bad news for an economy already struggling to cope with a demand crunch. The country grew by just 5% in the June quarter, in the slowest pace since 2013 mostly hit by a slump in demand.

The survey by RBI was conducted across 5192 households. These households were asked about general perceptions and expectations on the economic situation, employment scenario, price situation, personal income and spending (with inputs from agencies).

Image Credit: Rediff.com

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