Nearly 80% Participants Say Prices Have Increased: RBI Survey
According to the Reserve Bank of India’s (RBI) Consumer Confidence Survey, the findings of which were unveiled in June 2020, the economic situation of the country might be deteriorating.
The survey reveals that consumer confidence has weakened, with both, the current situation index and the future expectations index, recording a decline. The survey gauges how Indians feel about the general economic situation, employment, prices and their own income and spending patterns. Participants from 13 Indian cities, including Ahmedabad, Bengaluru, Bhopal, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Kolkata, Lucknow, Patna, Trivandrum and Mumbai, took part in the survey.
Economic situation: In May 2019, 38.8 per cent of the participants said that the economic situation had improved while 23.6 per cent said that the situation was just the same. Another 37.7 per cent said that the situation had worsened. In May 2020, only 14.4 per cent said that the situation had improved while 74.4 per cent said that it had worsened. On the other hand, 39.6 per cent participants said that they expected the situation to become better than before.
Prices: In May 2020, 79.1 per cent participants said that prices had increased while only 17.5 per cent said that prices remained the same. Only 3.4 per cent of these participants said that the prices had decreased. As for the future, 75.8 per cent believe that prices will continue to increase, while only 9.4 per cent are hopeful that prices might decrease the next year. About 14.8 per cent say that the prices might remain the same.
How Indians feel about the way prices are moving is an important indicator in determining real estate trends. Over the past few years, owing to high property prices, unsold inventory has continued to pile up. Improved affordability could trigger fresh demand among consumers.
Income: More people felt that their incomes reduced, when compared to last year. As against 29 per cent participants in May 2019, only 12.6 per cent of the participants said that their income improved by May 2020. In 2020, the number of participants who said that their incomes fell, formed the majority, which is 53.4 per cent of the participants. This year, about 39.5 per cent of the participants said that they were hopeful that their income would go up by next year as against 39.1 per cent who said it would remain the same, one the year ahead.
Inflation: In May 2019, 74.4 per cent participants said they noticed inflation in commodity pricing. A year on, 74.8 per cent participants said that inflation had increased. About 18.6 per cent said that it had remained the same between 2019 and 2020, but 73.4 per cent felt that it will go up in the next one year.
Spending: Rising inflation levels have led to an increase in spending, say 56.1 per cent of the participants, while 31 per cent feel it has remained the same. Only 12.9 per cent people feel that spending has decreased.
Do note that 69.3 per cent people feel that spending has gone up for essential items while 13.9 per cent people feel that spending on non-essential items has increased in May 2020. About 73 per cent participants are of the opinion that spending on essential items will continue to increase even in the next year.