A leaked NSO survey report says that expenditure by consumers across India actually fell over a six-year span till 2017-18. This is at odds with our GDP data. So what explains this finding?
Is Indian consumption in decline? Anecdotal evidence has pointed that way for some time. But now, a leaked survey report of the National Statistical Office (NSO), published on Friday in Business Standard, seems to confirm suspicions of such a trend. According to the report, inflation-adjusted consumer spending in 2017-18 fell for the first time in four decades. Titled Key Indicators: Household Consumer Expenditure in India, it crunched data from a vast sample of households across the country to find that in the period from July 2017 to June 2018, when the survey was conducted, India’s monthly per capita consumption expenditure was Rs.1,446, down 3.7% from Rs.1,501 in 2011-12, the last time the NSO went out asking people. The average money spent every month by rural residents in 2017-18 was 8.8% less than six years earlier, while urban consumption was up 2%. If accurate, this would lend credence to the argument that people’s purchases alone could not have sustained high levels of economic growth while investment was trailing off over the past seven odd years; the slowdown looks far broader. It also raises the worry that large numbers of low-income Indians might have slipped into poverty.
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