A survey conducted by RBI has found that consumer sentiment in India worsened to a five-year low. There was another survey done among 866 companies in the manufacturing sector to know how they were faring. The conclusions from the survey show the overall sentiment is not so rosy.
RBI’s consumer confidence survey follows a matrix where an outcome of 100 is the mean between optimism and pessimism. This survey indicated that it is 83.7 now, indicating a low level of confidence. This is reportedly the lowest figure since 2015.
“Current perception on the general economic situation, price levels and household income remained weak when compared with the position a year ago,” a report quotes the central bank as saying in the survey that covered 13 major cities.
The survey also observed that households were spending a lot less on non-essential items.
On the other side, the queries put to the manufacturing companies revealed that the capacity utilization stood at just 69.1%. This again is the lowest reported in the survey done by RBI since 2009 when it started. This figure is for the quarter July to September 2019. The figure for the previous quarter, April-June stood at 73.6%. RBI had selected 13 major cities in the country to conduct this survey and has concluded that the current situation finds the average consumer exhibiting low levels of confidence in the economy. The respondents also said they have reduced their expenses on non-essential items.
From the macro-economic perspective, the central bank will continue to keep the interest rates steady under the prevailing circumstances. In the last policy it kept the rate unchanged at 5.15% and it may stay that way for some months to come.
It cannot be denied that some sectors of the economy, steel, coal had electricity had recorded better performances and many experts had identified that as the green shoots of a recovery in sight. However, the findings from this survey don’t give you that inspirational feel.