Economy worsened since 2016, says RBI survey

Less than a year ahead of the 2019 general elections, a survey by the Reserve Bank of India has showed that 48% of the citizens believe that the Indian economy has worsened in 2018, when compared to the previous two years ago. The survey was conducted in six metropolitan cities, including Bengaluru.

The number of people who believed the economy was in bad shape was only 30% in December 2016, but has seen a sharp jump in May 2018. The survey, done a little before the Prime Minister Narendra Modi-led government completed four years, also showed that a majority of people believe price rise will be steep in the coming months and could hurt the common man.

The survey was conducted in Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi, and obtained 5,077 responses on households’ perceptions and expectations on the general economic situation, employment scenario, overall price situation, income and spending.

The RBI conducts a quarterly survey among households to gauge people’s perception of the economy and their outlook for the next year.

More than 44% believed the employment situation has worsened. In the previous survey in March this year, the number of people who believed employment prospects have taken a hit was a little less. It was only a little above 39% in December 2016.

In one-and-a-half years down the line, more and more people have been added in the group of those who felt the job situation has worsened in the country.

Over 88% felt that the general price level has increased and over 83% said they expected it will keep increasing in the coming year too.

The survey data released last week pointed to the people’s worries about the prices of food items increasing the most, while others believed housing prices will rise at a faster pace.

The survey was compiled on the basis of net responses on the economic situation, income, spending, employment and the price level for the current period and a year ahead, respectively.

The proportion of households expecting their spending will increase in the next one year remained almost unchanged at over 83% from the previous round.

The Modi-led government at the Centre is facing a flak on the price situation as continuously increasing petrol and diesel prices have led to a spike in the rates of almost all essential commodities and transportation.