Households expect higher spending next year: RBI Survey

The bi-monthly consumer confidence survey (CCS) further pointed out that spending on non-essentials by the households would go up in the next year.

Hyderabad:Households across the country expect that their spending would go up after one year, reveals a Reserve Bank of India (RBI) survey.

Out of the total 5,319 households surveyed across 13 cities last November, 63.0 per cent of the respondents have estimated that their spending would go up in November 2021 in comparison to their current spending.

The latest bi-monthly consumer confidence survey (CCS) further pointed out that spending on non-essentials by households would go up in the next year.

“Respondents reported higher essential and overall spending, though discretionary expenditure contracted. Whereas non-essential spending is expected to contract further in the coming year,” said the report.

Though the survey has not provided any details on the underlying assumptions of households, it is interesting to note that the percentage of respondents expecting higher spending has gradually come down during the Covid-19 pandemic period.

“While in last January over 74 per cent of the households were expecting higher spending after one year period, it has come down to 49.6 per cent in July 2020,” noted the survey.

It may be recalled that the first Covid-19 positive case was detected in Kerala in the last week of January followed by a nationwide lockdown in March and a series of 'unlock' measures starting from July.

Falling incomes

In a trend that would worry the policymakers, the majority of the respondents have said that their incomes have fallen compared to a year ago period.

The survey noted that incomes of 63.1 per cent of the respondents have fallen compared to a year ago period, while 28.5 per cent said their incomes have remained the same. The remaining 8.4 per cent of respondents said their incomes have gone up.

However, on the positive side, 51.0 per cent of the respondents expect a rise in their incomes next year, while 38.3 per cent of the households said they do not see any change in November 2021.