RBI Surveys Reveal Govt’s Failure To Unleash ‘Animal Spirit’ In The Economy

New Delhi, October 7: There is not an iota of doubt that the economy is witnessing one of the worst slowdown ever. Now two surveys put forward by the RBI in the public domain are unveiling some bitter facts that are alluding to the aggravating economic crisis.

The Reserve Bank of India (RBI) conducted a set of new surveys. One survey was conducted on consumer confidence in the economy, another one about how the on-going slowdown impacted country’s manufacturing sector.

The apex bank’s ‘consumer confidence survey’ shows that sentiment around income, employment and discretionary spending have declined to levels that have not been witnessed since Narendra Modi came to power in May 2014.

The survey constitutes two important index - the current situation index (CSI) and the future expectations index (FEI), which record how consumers feel about the economic situation, income, spending, and employment and price levels for the current period and the year ahead.

The CSI declined to 89.4 in September 2019 from 95.7 recorded in July 2019. On the other hand CSI was 108 when Modi came to power in May 2014. An important thing is that this indicator has never gone down below 90 in the last five years.

In September 2013, in the last days of the UPA-II, the CSI touched 88.

Industrial Outlook

The second analysis that the RBI has released is the 87th round of the ‘Industrial Outlook Survey’, which asks over 450 manufacturing companies on how they felt about the business climate for the July-September quarter and their expectations for the same in the next quarter.

This survey produces what the central bank calls the ‘Business Assessment Index (BAI)’, which declined sharply to 92.5 in Q2 FY’20 compared to 108.5 in the last quarter.

Also the BAI has not gone down below 100 since May 2014, when the BJP-led NDA government came to power.

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RBI Surveys Reveal Govt’s Failure To Unleash ‘Animal Spirit’ In The Economy

Industrial Outlook

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