Survey Reveals Indians’ Concerns Over Economic Well-Being

64% Report Deterioration or No Improvement in Economic Conditions

Newsreel Asia Insight #133
Feb. 16, 2024

A nationwide survey paints a picture of deep economic anxiety and dissatisfaction with the government’s handling of employment, inflation and economic policies, suggesting a perceived alignment with the interests of big business over the broader populace.

The “Mood of the Nation” poll of 2024, conducted by CVoter for India Today, found that 64% of the people feel their economic situation has either deteriorated or remained the same over the past decade, with 35% specifically feeling their situation has worsened since 2014, under the current government, according to The Wire.

Economic perceptions directly influence consumer confidence, which in turn affects spending behaviours. If a large segment of the population feels economically insecure, it may lead to reduced consumer spending, impacting various sectors of the economy and potentially leading to slower economic growth.

Economic discontent can also lead to social unrest if large segments of the population feel left behind or unfairly treated. This concern is particularly relevant in a diverse and populous country like India, where economic disparities can exacerbate social tensions.

The perception of economic deterioration or stagnation may also influence the public’s outlook on the future, affecting everything from investment decisions to career planning. This could mean reassessing their expectations for economic mobility and security.

Further, the survey found that a striking 71% of respondents describe the unemployment situation as either “very serious” or “serious,” with 54% labelling it as “very serious.” This sentiment is supported by objective data and controversies, including the withholding of employment data by the government five years ago, The wire notes.

This indicates a significant portion of the population is experiencing or is aware of high unemployment rates. It’s a critical issue as it directly affects individuals’ ability to earn a living, sustain themselves and their families and contribute to economic growth.

Unemployment rates are a key indicator of the health of an economy. High unemployment suggests that the economy is not creating enough jobs to accommodate the workforce, which can be a sign of deeper economic problems such as low investment, poor economic policies or structural issues within the economy.

High unemployment has profound social and psychological impacts on individuals and communities. It can lead to increased poverty, inequality and social unrest. On a personal level, prolonged unemployment can cause psychological stress, loss of self-esteem, depression and other mental health issues.

If the unemployment situation is particularly severe among young people, this raises concerns about wasted potential and the long-term economic implications of a generation that starts its career facing significant hurdles. This can lead to a delay in achieving milestones such as starting a family or buying a home, which in turn affects economic demand.

In the context of economic recovery, especially post-pandemic, high unemployment rates can slow down the recovery process. It indicates that businesses may be struggling to bounce back, affecting overall economic resilience and growth prospects.

High unemployment, especially if prolonged, can have long-lasting effects on the economy, including decreased consumer spending, lower tax revenues, and increased government spending on social welfare programs. This can lead to a vicious cycle of economic stagnation and further unemployment.

Furthermore, managing current household expenses is a challenge for 62% of those surveyed. When including those who find raised expenses manageable, this concern extends to 95% of respondents. A total of 66% do not anticipate an increase in their household incomes, with 30% expecting it to deteriorate.

This stress of managing household expenses can lead to a decrease in quality of life, as families may have to cut back on essentials or forego savings and investments for the future.

The fact that 66% of respondents do not anticipate an increase in their household incomes, with 30% expecting it to deteriorate, underscores a pervasive sense of economic insecurity. This pessimism about future income prospects can dampen consumer confidence, which is crucial for economic growth.

Financial stress and insecurity can lead to reduced consumer spending. Since consumer spending drives a significant portion of economic activity, a reduction can slow economic growth, leading to a cycle of reduced business revenues, further job cuts and increased unemployment.

To cope with rising expenses and stagnant or declining incomes, households may increase their reliance on debt, leading to higher levels of financial vulnerability. This can exacerbate economic inequality and increase the risk of financial crises.

Moreover, the struggle to manage household expenses can have broader social implications, including increased poverty rates, higher instances of mental health issues and a strain on social services. Children in families struggling financially may also face long-term disadvantages in terms of education and health outcomes.

The survey further revealed that 26% of participants consider price inflation to be the incumbent government’s most significant failure. Recent statistics indicate that food inflation reached 8.3% and retail inflation stood at 5.1% in January, both surpassing the Reserve Bank of India’s acceptable thresholds, The Wire points out.

The survey also showed that 52% believe economic policies over the past 10 years have favoured big business, with only a minority seeing benefits for farmers (9%), small businesses (11%) and the salaried class (8%). Nearly half of the respondents (45%) feel that the economic gap between the rich and the poor has widened.