A National Statistical Office (NSO) report, based on a consumption expenditure survey conducted between July 2017 and June 2018, shows a drop in consumer spending for the first time in more than four decades, Business Standard reported. These figures have been adjusted for inflation, with 2009-10 as the base year.
The period in which the survey was conducted was during the implementation of the goods and services tax (GST) which succeeded demonetisation by the Modi government in November 2016.
According to experts, a fall in consumption expenditure symbolises the growing prevalence of poverty and low demand in the economy – which is mainly driven by the rural market.
The findings of the report show that in 2017-18, consumer spending in villages fell by 8.8 percent, while in cities, it rose by 2 percent over six years.
The report was supposed to be released in June this year but was prevented from being distributed because of its “adverse” findings. The report titled ‘Key Indicators: Household Consumer Expenditure in India’ was leaked out of the NSO office and reported by Business Standard on the 15th of November.
Responding to the spread of the information, the government in a recent statement, has decided not to release the survey officially and scrap the study altogether over problems with ‘data quality’.
Experts said that the most worrying part of the report was that it indicated a dip in food consumption for the first time in decades, showing that malnutrition has increased in the country.
In 2017-18, an average person from a rural area spent Rs 580 monthly on food, falling from Rs 643 in 2011-12. Amongst people from urban regions, their spending fell from Rs 946 to Rs 943 over the same period.
According to the report, people across India slashed expenses on essential cooking items such as edible oil, salt, sugar and spices.
The last time such a dip in consumption was observed by the NSO, was in the year 1973 owing to the global oil crisis.
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