The Reserve Bank of India’s monthly Consumer Confidence Survey for September shows deep pessimism about the employment situation among Indian households. For the first time ever since September 2012, when this index came into being, 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, 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.

Despite this, a majority (53%) anticipate an increase in income in the coming year; only 9.6% feel it will go down. On the whole, therefore, people are more sanguine about their own prospects than about the larger economy.

On the overall economic situation, almost half (47.9%) of the households surveyed felt it had worsened. The last time a higher proportion than this had expressed such a view was in December 2013, when 54% had said the economy had worsened.

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More worryingly, 31.8% felt the situation will only worsen further in the coming year. Not since Sep 2013, when 38.6% expressed this view, has the proportion with a gloomy outlook on the near future been so high.

The view on prices is middling, with almost three-quarters perceiving inflation as having risen and just over three-quarters feeling it will go up further a year down the line. These, however, are not unusual proportions when it comes to perceptions about inflation as the data from the past shows.

The perceptions about the overall economic situation also seem to be influencing people’s spending choices, with the proportions of those reporting that their spending on non-essential items had gone down or had remained the same being the highest since Sep 2015, from which month this data is available. For the first time, over a quarter of those surveyed (26%) said their spending on non-essentials would go down in the coming year. That’s bad news for an economy already struggling to cope with a demand crunch.

Interestingly, the perception is that spending on essentials is already higher than it used to be and will only increase further in the year ahead. Taken in conjunction with the perception on inflation, this could explain why people believe they are spending less on discretionary items and are likely to continue to do so.

The survey was conducted in 13 major cities. These included the eight largest metros – Delhi, Mumbai, Kolkata, Chennai, Bangalore and Hyderabad – and seven other state capitals in Bhopal, Guwahati, Jaipur, Lucknow, Patna and Thiruvananthapuram. It polled 5,192 households.


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