A new Government study clearly shows that the consumer’s spending fell for the first time in more than 4 decades in 2017-18, fundamentally on the back of falling rural demand, according to the news report published in Business Standard. The leaked NSO report says the average amount of cash spent by an Indian in a month fell by 3.7% to Rs 1,446 in 2017-18 from Rs 1,501 in 2011-12.
According to a leaked National Factual Office (NSO) overview, titled ‘Key Markers: Family Shopper Use in India’, purportedly appears that the normal sum of cash went through by an Indian in a month fell by 3.7% to Rs 1,446 in 2017-18 from Rs 1,501 in 2011-12. “The figures for monthly per capita consumption expenditure (MPCE) are in real terms, meaning these 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,” said the news report.
Whereas the consumer investing declined by 8.8% in 2017-18 in India’s towns, in cities it rose by 2% over the 6 years. The report, citing financial specialists, claims that the final time the NSO appeared a drop in utilization in real terms was in 1972-73. According to the Business Standard report, “there has been a plunge in nourishment utilization for the “first time in decades”. Whereas country Indians spent on normal Rs 580 on a month to month premise on nourishment in 2017-18, they spent Rs 643 in 2011-12.
Since the new leaked survey overview comes after 6 years, 2011-12 and 2017-18, it is vague when this plunge in customer spending happened, inferring that it can be a slow decrease or a more later and sudden drop caused by recent disturbances to the economy such as demonetisation and the roll-out of the goods and services tax (GST).
Prior this year, in August 2019, Jawaharlal Nehru University Financial Specialist Himanshu said that in 2018, prices, average consumption expenditure in rural areas declined from ₹1,587 per person per month (ppm) in 2014 to ₹1,524 ppm in 2017-18. The decline in urban areas was from ₹2,926 ppm in 2014 to ₹2,909 ppm in 2017-18. It did increase marginally in 2014-15, the first year of the Modi government, to ₹1,667 ppm in rural areas and ₹3,212 ppm in urban areas at 2018 prices. But after 2015-16, it has declined at 4.4% per annum in rural areas and 4.8% per annum in urban areas. From the time that NSSO consumption expenditure figures have been available, there has never been such a sharp decline.
Source: Business Standard