RBI Survey suggests economy should recover Quickly
The RBI reported the latest Consumer Confidence Survey yesterday. The survey has a robust sample in Urban India and is being carried out since 2012. The latest survey was carried out during May. Most of the numbers were the worst ever in the last 8 years that the RBI has been doing the consumer confidence survey.
But here is the good news everyone missed in the RBI Survey.
- During the worst years of the Manmohan Singh years (2011-13), 32.1% reported that their spending would come down in the next one year. It is just 8.7% in the latest survey
- Only 13% reported that they have cut down in spending. It means that whatever other cuts we are seeing is due to lockdown and not because people don’t have money.
- When it comes non-essential spending, only 36% reported that it will go down in the next one year. This is inspite of the fact that nearly 60% did not expect their incomes to go up
- While it is true that 53% have seen a drop in income, only 21% expect the same in the next 12 months
What this data seems to suggest that should the COVID situation be controlled, Indians will be back to spending and the economy should recover swiftly. There are still some loose ends like non-essential spending and that may take slightly longer time to recover.
However, the main issue is not the Indian Consumer, it is how quickly the COVID situation can be controlled. With nearly 10000 cases yesterday, it appears things are unravelling in slow motion