Issues such as inflation, unemployment, and falling income levels are major election issues this time.
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The findings of the Reserve Bank of India (RBI)’s consumer confidence survey, conducted in March in urban areas, on concerns regarding livelihood are similar to the findings of the CSDS-Lokniti pre-poll survey, published in these pages.

One major conclusion of the CSDS-Lokniti pre-poll survey was that while the NDA has an edge over the Opposition in the run up to the Lok Sabha elections, issues such as inflation, unemployment, and falling income levels are major election issues this time.

In the pre-poll survey, 32% of the respondents chose ‘increasing unemployment’ as the reason for not electing the incumbent government. The other two reasons in the list of top three reasons were ‘price rise’ (cited by 20% of the respondents) and ‘falling income’ (cited by 11% of them). ‘Price rise’ and ‘increasing unemployment’ also featured as the top two ‘least popular initiatives’ of the government.

The RBI’s latest survey, conducted between March 2 and 18th among 6,083 respondents across 19 major cities, shows similar concerns among urban consumers.

Chart 1 | The chart shows the share of respondents in the RBI survey who said employment opportunities have improved and those who said they have worsened compared to a year-ago period. 

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Close to 38% of the respondents said the job outlook has worsened. A similar share said it has improved compared to a year-ago period. The rest said the outlook remained the same (not plotted in the graph).

These numbers should be read keeping in mind that the comparisons are from a low-base (the year-ago period), when consumer confidence was still recovering after the pandemic. While confidence about job opportunities are now closer to pre-pandemic levels, close to one-third are pessimistic about employment scenarios. These findings concur with the results of the pre-poll survey.

Chart 2 | The chart shows the share of respondents in the RBI survey who said income levels have improved and those who said they have worsened compared to a year-ago period. 

Confidence about income levels is still recovering since the pandemic. Close to 22% of the respondents said income levels have decreased compared to a year-ago. This is higher than the 10% in 2014-15. Close to 27% said income levels have increased. The rest, close to 50%, said income levels have remained the same. This is a pain point given that the prices of commodities are increasing every year.

Chart 3 | The chart shows the share of respondents in the RBI survey who said the price levels of commodities have improved and those who said they have worsened compared to a year-ago period. 

Close to 90% of the respondents continued to say price levels of items have increased compared to the year before. A mere 1% said they have decreased; and 9% said they have stayed the same.

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When Chart 2 and Chart 3 are read together (with 72% saying income levels have decreased or have stayed the same and with 90% saying price levels have increased, both from a year-ago period), it is understandable why these two became the main talking points in the CSDS-Lokniti pre-poll survey.

Chart 4 | The chart shows the share of respondents in the RBI survey who said the general economic situation has improved and those who said it has worsened compared to a year-ago period. 

The confidence levels about the economy are back to pre-pandemic levels. However, it must be noted that the economy had technically entered a recession in 2019. Confidence levels are still not back to the 2015-17 levels, as 36% in March 2024 said the economy had worsened from a year-ago period.

Source: RBI’s Consumer Confidence Survey

Also read | Urban consumer confidence stable, optimism in income levels | Data 

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