The Reserve Bank of India’s (RBI’s) Consumer Confidence Index slipped to 91.1 in November this, reaching the lowest level in the last four years. A reading of above 100 signifies optimism, while one below 100 means pessimism. The survey was conducted in the six metropolitan cities of Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi. In fact, consumer confidence has been on a downward spiral since May this year. steadily since May 2017.
The dip in consumer confidence can be attributed to the perception of employment prospects. According to the RBI, the employment situation is the worst in the last four years. Since December 2016—a month after Demonetisation was forced upon the country—net employment prospects have been negative. What is worrying is that the negative net responses have been increasing. Demonetisation and the Goods and Services Tax (GST) have had a negative impact on employment.
Congress Vice President Rahul Gandhi has been the only Opposition leader who has not let the people forget what the Modi government has done to the economy. With regards to Demonetisation, and GST, the Congress’ stand has been unambiguous from day 1. Not too long ago, Mr. Gandhi had compared the twin disasters to torpedoes, which would sink the economy. Former PM Manmohan Singh had predicted that the move cost India 2% of its GDP. At the end of the first quarter of this financial year, when the GDP growth came down to an abysmal 5.7%. PM Singh was proved right.
With regards to GST too, the government, under fire from Mr. Gandhi’s consistent campaign, rather belatedly decided to cut the tax rate on 178 items of daily use. While the government claims that the effects of Demonetisation and GST are “transitory” the truth is that the damage cannot be undone in the matter of a few quarters.