RBI has been conducting consumer confidence survey and publishes results on consumer perception about the prevailing economic conditions in the country(Current Situation Index -CSI).
RBI expects the survey to provide evidence of consumer confidence and a predictor of consumer spending. They expect economic agents that influence aggregate supply – manufacturers; retailers; investors; builders; government agencies - rely on measures of consumer confidence to make an assessment of consumption expenditure which, in turn, forms their production decisions.
The indicators are expected to also provide useful insights to wielders of monetary and fiscal policies who have to make decisions on modulating aggregate demand in the economy around the path of productive capacity in the economy in order to ensure macroeconomic stability.
The survey first started in 2010, is conducted quarterly and summarized into yearly report and released in the 3rd quarter every year.
Recently, RBI released its 16-17 report.
The survey is done through opinions collected from 5400 respondents in 6 cities - Bengaluru;. Chennai; Hyderabad; Kolkata; Mumbai; and New Delhi.
The CSI is a summation of five parameters - general economic situation, employment scenario, price level, household income & household's spending.
While, the results has a lot of charts and statistics, what is perplexing is that RBI has stuck to the six cities till date.
Two of fastest growing states, in terms of GDP growth %, are not represented at all (Gujarat & Madhaya Pradesh). Also missing out is UP, Bihar, and so 35% of population has remained unrepresented. Kerala, the most literate state is missing. And finally, NE is completely neglected. Kolkata cannot be by any stretch of imagination represent NE?
The second key aspect of the report is its relevance. The report by its obvious nature should be central part of discussions, debate and should have seen fair representation in the media and economic forums
Save for an article, there is no murmur about this survey. The yearly economic survey by the Government of India also does not seem to bother too much on the results of this survey.
Analyst and other institutions seems to be either unaware or not keen to look at this report. Not to mention, manufacturers, retailers or other economic agents have no reason to use this report.
Surely there is enough evidence for RBI to rethink its main assumptions of this survey and its relevance.
In my opinion, RBI should stop releasing reports that does not represent India in its current avatar. The "metro is a representation of India", is no longer an assumption that RBI should lean into.
RBI, do you know your consumers?
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