HT Leadership Summit 2012
As Prime Minister Manmohan Singh and his team pull out all stops to shake off criticism of policy paralysis with a string of reform measures, rising prices and sliding growth continue to remain key worries.
A Hindustan Times survey, one of the largest of its kind covering 28,395 respondents across 13 cities, shows nearly two in three (62.7%) of the people surveyed said that high food prices were hurting their pockets the most, followed by costlier fuel prices (23.4%).
Yet, at the same time, a majority (50.8%) believes that the worst is over for the economy though six out of ten respondents (57.6%) still worry about losing their jobs and falling incomes, according to the survey conducted by research agency Hansa.
India's factory output fell by 0.4% in September and exports fell by 1.63% in October, contracting for the sixth successive month, confirming what most analysts had feared: the Reserve Bank of India's (RBI's) bitter medicine to raise interest rates to cure inflation has not tamed prices, but has cast side effects on growth.
Slower industrial growth could result in lesser job opportunities and lower salary hikes as corporations, squeezed in by lower sales, hold back investments and cut down on hiring.
"Earlier, my employees were working overtime and even on Sundays, but now we shut the shop-floor at 6 pm. What's more, I have had to take the very difficult decision of retrenching 200 of my employees from a pool of 400," said a Gurgaon-based exporter requesting not be identified.
India's economy grew 5.5% during April to June this year, marginally higher than the5.3% recorded during the previous three months, but the full year growth for 2012-13 may still be below 6%, mirroring the sharp slowdown in the broader economy.
Only 17% of the respondents to the survey were, however, optimistic that the Indian economy will rebound to a growth trajectory of more than 7%.
Ignoring carping allies and protesting rivals despite a delicately poised coalition, the government in September had opened what looked like a second innings of sweeping change with an eye on India regaining the advantage that seemed lost after a volley of criticism in the international media, think-tanks and credit-rating agencies.
In September, in a move fraught with political risks, the government had raised diesel prices by Rs. 5 a litre - steepest ever hike - and capped sale of cooking gas to six cylinders a year for each family.
But nearly one in two (49.3%) of those surveyed felt that the Prime Minister has not been able to sell his reforms agenda, while 27.9% felt that the fiscal deficit-shorthand for the amount of money government borrows to fund its spending - was currently the biggest drag on the Indian economy.
"It will take time before most of the stepped-up reforms bear fruit and rekindle India's growth potential and drive inflation down," said Mole Hau, of BNP Paribas.
India's overall consumer price inflation remained at a high of 9.75% in October, up from 9.73% in September.
Surging prices have prompted people to cut down on expenses on non-essential items.
"We stay in a small one-room house in east Delhi for which we pay Rs. 3500 a month as rent. Another Rs. 8000 a month I pay every month to a private financier for the Rs. 4.65 lakh I had borrowed to purchase my auto rickshaw. This leaves me with barely anything to spend on basic expenses such as food, clothing and children's education," said Dharampal, an auto rickshaw driver, who migrated to Delhi 15-years ago from Bihar's Motihari district.