For the First Time in 40 Years, Consumer Spending on the Downturn

“Key Indicators: Household Consumer Expenditure in India” report by the National Statistical Office (NSO) states that consumer spending has fallen by 3.7% to Rs. 1,446 in 2017-18 from Rs. 1,501 in 2011-12. This fall seems to have been the result of the slowing rural demand, the report said.

Crux of the Matter

1. In the (financial) year 2018, consumer spending in cities was up by 2%, whereas it was down by 8.8% in villages.

2. There has been a decline in Food Consumption spending for the first time in decades. The rural food consumption spending fell to Rs. 580 in the year 2017-18 from Rs. 643 in the year 2011-12.

3. Rural people consumed less of all food products except milk and milk-based items, while both, rural and urban people consumed less of spices, sugar, salt, oil, to an extent of 16.6% and 14.2% respectively . The slack can be a hint of increasing poverty and detrimental demand in the economy.

4. Economists are unable to determine the exact time of the beginning of this slowdown.

5. There also has been reports that the survey was withheld because it contained “adverse findings”.

Curiopedia

Consumer spending is the acquisition of goods and services by individuals or families. It is the largest part of aggregate demand at the macroeconomic level. There are two components of consumer spending: induced consumption (which is affected by the level of income) and autonomous consumption (which is not). Read More

Curated Coverage

1. Business Today – Consumer spending falls for first time since 1973 due to low rural demand: NSO data

2. The Economic Times – Consumer spending declines for first time in four decades

3. The Wire – Consumer Spending Sees First Fall in Over 40 Years on Back of Weak Rural Demand: Report

#Business #Consumer #Economy #India