Decline in household savings due to COVID-19: Survey

A survey highlighted that a significant number of consumers have indicated decline in household savings during the COVID-19 pandemic due to job loss, salary cuts or delays in payments.

New Delhi: A significant number of consumers have indicated decline in household savings during the COVID-19 pandemic due to job loss, salary cuts or delays in payments, says a survey.

According to the bi-annual Mood of the Consumer Survey by LocalCircles, in close to nine months of the pandemic many consumers are yet to recover from the giant-fall in their personal finance amid job losses and salary cuts.

"Of 8,240 responses, 68 per cent consumers said their household savings declined in the last 8 months during the COVID-19 pandemic," said the survey done to assess consumers spending behaviour during the festive season, spending plans for the next four months, and household's expectation regarding earnings and savings situation by March.

The survey received more than 44,000 responses from consumers across 302 districts of India. 62 per cent respondents were men and 38 per cent were women. As many as 55 per cent respondents were from tier I, 26 per cent from tier II, and 19 per cent from tier III, IV and rural districts.

However, nearly 50 per cent of consumers have plans to spend on buying discretionary products or assets in the next four months, the survey noted.

"One of the big takeaways is that 10 per cent respondents plan to spend over Rs 50,000 on discretionary purchases in the next four months while 21 per cent respondents plan to spend between Rs 10,000-50,000 in this period. This would mean good news for many sectors of the economy who saw slowdown in consumer demand in the first six months of FY 20-21," it said.

However, with the economic recovery seen in the last 3 months, there is clearly a rise in optimism and 15 per cent fewer households now expect their FY 20-21 earnings to decline in comparison to last year.

While for the majority of the households, the earnings this year will be lower than last year, it said, adding, the real story is in the reduction of uncertainty about the future.

Many consumers are now confident that though this year has been impacted, they haven't lost their job and things are getting back on track with their business or employer's business, and they will likely see their earnings increase or go back to previous year levels, it said.

(PTI Report)