The recent data by the National Statistical Office (NSO) on Consumption Expenditure Survey raised concerns regarding consumer spending in India. It depicted a 3.7% descent in dietary utilization portraying the upsurge of malnutrition and thereby increased poverty. This is suspected to be majorly due to falling in demand in the global market.
Business Standard Report
NSO did not release the report in June due to unpropitious findings. Subsequently, Business Standard leaked the report. They managed to reveal the first downfall in four decades in consumer spending in India
Data Depicted by NSO
Following demonization, the survey was conducted between the period of July 2017 and June 2018. This household expenditure in India report revealed that an individual spent an average of Rs 1,446 in the year 2017-18 against Rs 1,501 during 2011-2012. Despite the estimation of monthly per capita consumption expenditure (MPCE) according to inflation, there has been a significant decline observed.
Similarly, the survey showed that rural citizens expenditure on food decreased from Rs 643 in 2011-12 to Rs 580 in 2017- 18. Accordingly, they estimated a fall of 10% during this period. On the other hand, the urban resident’s spending rate has remained stagnant over the years. That is on an average Rs 943 (2011-12) to Rs 946 (2017-18) as represented by the business standard report.
Reasons for Decline in the Past Years
Initially, during the mid-1960s the decline was due to domestic nutrition hardship. Following that, there was a decline in consumer spending in India during the period of 1972-73. This main reason was the effect of global oil distress. Finally, the decline after 4 decades in 2017-18 was the consequence of a drop-in demand in the global market.
Address the Crises!
There was a 6 year time interval between two surveys. Therefore, the information generated by the NSO is unreliable according to Abhijit Sen, the Former Planning commission Member. Nevertheless, the prediction is not negligible. As an estimate of the report forecasts a 10% increase in the nation’s poverty. Hence, urging the government to devise a series of measures to overcome economic downfall, increase food consumption and rising global demand. Thereby demolishing malnutrition and poverty and thus prepare for advancement in the otherwise stagnant economy.
Government may need to act quickly on slowdown and increase consumer spending in India specially rural India.