RBI survey – A Reality Check for the Modi Government

Most Indians feel that the economic situation has worsened in the country since the last three years. The optimism that general public felt, has slowly transformed into a pessimistic economic outlook, as the BJP completed 3 years at the centre. No, this isn’t  some anti-government think tank that is making this claim, but what the latest Reserve Bank of India’s Consumer Confidence Survey had found out.

The Consumers Confidence Survey captured the perceptions of households across six metropolitan cities – Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi. The respondents in the survey were asked about their perceptions of the general economic situation and various economic indicators like employment, incomes, consumption, price levels etc. For each indicator, the respondents chose one out of the three responses – improved, remained the same and worsened.

Based on the responses from the survey, RBI built a Current Situation Index (CSI). If the value of the index was above 100, it meant that people are optimistic about their situation. If it was below 100, then it meant that the economy has slipped into the pessimistic zone.

The Index (CSI) showed 108 in September 2014 – indicating that there was a sense of optimism about the economy, immediately after Modi won power at the centre. But over the last three years, with one policy disaster after another, the CSI fell to 96.8. Without any constructive policy decisions to improve incomes of the people or employment, people’s economic expectations have turned sour towards the government, sliding deep into the pessimistic zone. 

This survey is conducted multiple times every year. If we look at the latest survey for the month of June 2017 and compare it with previous years, for each indicator – the prevailing sense of gloom becomes more obvious.

When asked about their perception of the economic situation in June 2015, 43% of the respondents felt that the situation has improved, while 29% felt that the situation has deteriorated. By 2016, the percentage of people who felt the situation improved has come down to 40. By 2017, it fell even more, to 32%.

The percentage of respondents who felt that the economic situation has worsened increased from 29% to nearly 40%.

People do not seem to be buying Modi’s promises, of creating one crore jobs a year, either. Respondents who think that employment situation has improved fell from 36% to 31%. This meant that in 2017, nearly 70% of the people feel that the employment situation has not improved at all.

People’s incomes too, have not improved in the last three years. A majority (53%) of the people feel that their incomes have stagnated, while an increasing number think that their income has worsened. While in 2015, 35% of people felt that their incomes have improved, only 24% thought so in 2017.

More than managing the economy and economic welfare, Modi government has been busy creating the illusion of an efficient and strong government - through media management and has shut down those who dared to call it out on its follies.

Yet, it is clear from the RBI’s survey that the people are not falling for this deception. No amount of media propaganda can convince unemployed people that they are employed. Even the most ardent of the Bhakts cannot survive on an empty belly when their incomes go down.

If Modi government continues on its present course, those who have put him on the pedestal, with expectations of employment and prosperity, will soon bring him down to the earth.

Disclaimer: The views expressed here are the author's personal views, and do not necessarily represent the views of Newsclick.