New Delhi: Decline in income due to rising household expenses during the pandemic has hit many Indian households hard. For many, the prices of vegetables, legumes, oil, milk and other essentials have continued to climb over the past 12 months, leaving a significant proportion of families struggling to make ends meet. Global commodity prices have softened recently but remain elevated along with delivery and logistics costs reflected in the prices of products and services. In most cases, family income has not kept up with high inflation. Unlike government jobs, private sector employees do not receive relief in the form of DA or other benefits to offset rising costs. All of this has had a severe impact on consumer spending.
On the inflation front, there has been some good news recently. Wholesale Price Index (WPI) inflation data eased to 4.95% in December from 5.85% in November. Consumer Price Index (CPI) inflation eased to 5.72% last month, below the Reserve Bank of India’s (RBI) maximum allowable level of 6%.
Looking ahead to 2023, LocalCircles has conducted its first survey, the Mood of the Consumer survey, to understand Indian household income, savings, and financial plans. Over 37,000 responses were received from household consumers in 309 districts of India. Overall, 64% of respondents were male and 36% were female. 42% of citizens are from metropolitan areas or primary districts, 34% are from secondary districts, and 24% are from tiers 3, 4 and rural districts. bottom.
About 7% of households expect a 25% decrease in annual income in 2022-23, 22% expect a 10-15% decrease, and 10% expect a decrease of up to 10%. 21% were uncertain about the impact.
The first question of the survey aimed to estimate the change in household income for the fiscal year ending March 2023. We asked the respondent, “What do you think her current 12-month household income for fiscal year 2022-23 will be compared to the last 12 months?” In contrast, 60% of her respondents from 12,036 households said they expected their household income to decline this year. Of these, 7% expect a 25% decrease in income, 22% expect a 10-15% decrease, 10% expect a drop of up to 10%, and 21% have an unknown level of impact. On the bright side, 25% of respondents expect household income to rise by up to 25% in 2022. 23, 7% do not expect any change as the year ends on March 31, 2023.
Just over half of household consumers surveyed, or 56%, expect average household savings to fall in FY23, while only 19% expect an increase.
One of the biggest problems expressed by home consumers is the need to dabble in savings to support their livelihoods. A variety of global and domestic factors, stemming from the war between Russia and Ukraine, have pushed up the prices of most essential commodities and raised the cost of products and services affecting middle-class households, leaving many had to put rising school costs into savings. Pay the fee or buy a replacement phone. In several other cases, family members lost their jobs due to layoffs, and households had to dive into savings for the bare minimum.
The next survey question focused on understanding the percentage of households expected to save less in 2022-23. Household respondents were asked, “How is your household doing in the current 12 months (April 22nd to March 23rd) compared to the previous 12 months (April 21st to March 22nd)? Of the 11,919 respondents to this question, only 19% said household savings could increase. 6% expect their savings to “probably increase by 25% or more”; another 9% expect their household savings “I’m optimistic, but I can’t say how much.” Of the remaining respondents, 20% expect household savings to “probably stay the same”; ”I am afraid. Another 6% predict that there may be a decrease, but cannot say by how much, and 5% are unsure about this. Overall, 39% of households expect to have some savings in 2022-23, similar to last year. However, given the many challenges, only 19% expect their savings to increase this year.
52% of home consumers surveyed expect economic uncertainty to persist over the next 6-12 months.
2022-2023 started with a cloudy outlook for households’ economic outlook due to the war in Ukraine and Russia and the impact on inflation, but by July 2022 things started to improve slightly, with average It led to a great festival season. However, hiring sentiment turned negative for him by November, with layoffs beginning in December and increasing uncertainty, especially in the tech, start-up and SME sectors. Things only got worse in January as companies held onto the bad news until the end of the year.
The next question focuses on understanding how households account for this economic uncertainty in their budgets and financial plans, and whether they expect the same to continue beyond 2022-23. I guessed. We asked survey respondents, “How long do you expect economic uncertainty to last this year in your household financial planning?” By contrast, 52% of the more than 13,000 respondents said he expects economic uncertainty to last six to 12 months. Twenty-three percent said he expects uncertainty to last three to six months in 2023.
In summary, the 2023 LocalCircles Mood of the Consumer survey found that 6 in 10 households expect their income to decline in the 2022-23 fiscal year. Moreover, as these incomes decline, many are dipping into them to make ends meet, affecting their savings. We expect total savings balances to decline through 2023. With already high unemployment and a significant number of formal sector firms laying off staff, the economic outlook is very uncertain for many households. As households plan their budgets for the next few months, 52% expect economic uncertainty to last 6-12 months and 23% expect a period of uncertainty to last 3-6 months I think. As the government lays out her budget for 2023, we are doing all we can to support them, bearing in mind the pressures on incomes, savings and uncertainty experienced by most Indian households. Grace should be offered.
Catch all business news, market news, breaking news events and breaking news updates with Live Mint. Download The Mint News app for daily market updates.
Less
