Hyderabad: The moderate economy slump, as claimed by the Narendra Modi sarkar, is already creating tremors across India as consumer spending has started dwindling.
It is more pronounced in the interiors where people are still reeling under the impact of the note ban that hit their lives on an ‘ill-fated’ November 8, 2016. The situation has been made worse by the ongoing economic recession. With a weakened earning capacity coupled with a cash-crunch, rural consumers are forced to tighten their purse strings and compelled to save for a rainy day.
The drop in consumer spending is adding to the poverty level in the country. The number of people below the poverty line (BPL) has risen to an alarming 10 per cent in the past eight years.
For the first time since 1973, the consumer spending has nosedived, and National Statistical Office (NSO) attributes this to the low rural demand. NSO carried out a study on consumer demand and spending pattern between July 2017 and June 2018. The report was scheduled to be released on June 19 but was put on the backburner, the reasons for which are unfathomable. It further claims that the consumer spending in villages for FY18 dipped by 8.8 per cent whereas it rose by two per cent in urban areas over six years.
The dip in consumer spending indicates an increase in poverty in recent years, says the report.
According to the latest survey titled ‘Key Indicators: Household Consumer Expenditure in India’, the consumption expenditure is at a 40-year-low. The average sum of money a person spends in a month dropped by 3.7 per cent to Rs 1,446 in the 2017-18 financial year from Rs 1,501 in 2011-12 fiscal. The numbers have been adjusted for inflation, taking 2009-10 financial year as the base year.
The monthly data on per capita consumption expenditure (MPCE) are in real terms. The MPCE numbers have been adjusted for inflation, keeping 2009-10 as the base year. In 2011-12, the real MPCE had risen 13 per cent over a period of two years.
The average domestic household expenditure fell 3.7 per cent to Rs 1,446 in 2017-18 from Rs 1,501 in 2011-12 financial year. As a result, food consumption in rural areas was also badly hit. Rural people’s spending on food per month has been put at 643 in 2011-12, which, subsequently, fell to Rs 580 in 2017-18.
According to experts, the decline in the consumption expenditure suggests the growing incidence of poverty and low demand in the economy, led by the rural market Global oil crisis is also among one of the causes for the downslide.
Meanwhile, government officials said that the quality of data was below the standards prescribed by the Union Government.
“That’s the reason why the government is not releasing the report. It will consider the report as a draft, but not as the final report,” said the official at the Union Ministry of Statistics and Programme Implementation (MoSPI).