Ahead of polls, RBI survey reveals grim employment state

Reuters file photo.

An RBI survey has revealed an alarming dip in consumer confidence, causing serious worry to the BJP ahead of the Assembly elections in Karnataka.

The Reserve Bank of India’s quarterly survey, held in March, covered households in Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi. The 5,297 households quizzed for the survey revealed that people expect a bleak employment situation this year, while also fearing a steep rise in prices of essential household items.

Indeed, consumer confidence dropped from 96.9 in December — the last time the survey was conducted — to 95.1 in March. Expectations for the next year also fell to 117.4. A reading below 100 would indicate pessimism.

While consumer confidence took a hit due to a hopeless job situation, more than 80% people surveyed in the six cities also expected prices of essential commodities to rise in the April-June quarter. About 40% of them even expect prices to rise at a faster pace in the next one year.

Findings of the survey — released last week — primarily reflected deeper concerns over the rise in prices of essential items, while there is also an expectation on the surge in housing prices.

Rising prices and farmers’ distress are chief among a series of issues in the state elections, with the prime minister trying to woo the farmers through his government’s decision to increase Minimum Support Prices (MSPs) for their produce and efforts to double their income by 2022.

The survey showed that the households’ current perceptions on the general economic situation dived sharply from the neutral level in December. Their one year-ahead outlook also deteriorated, despite remaining in the range of optimism.

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