It’s not all that cloudy

A majority of Indians are uneasy with the direction in which the country is headed and blame the government for the deteriorating economic situation, finds a survey by Pew Research, a Washington think-tank.

A majority of Indians are uneasy with the direction in which the country is headed and blame the government for the deteriorating economic situation, finds a survey by Pew Research, a Washington think-tank. The findings are part of its global poll across 21 countries, which show India breaking ranks with China and Brazil on the popular perception of their economies. But Indians, alongside the international majority, are more optimistic about their personal finances: they feel they are wealthier than they were five years ago and definitely better off than their parents. In fact, the divergence in perception of how much individuals will do better than the overall economy is among the highest in India. This could be due to the urban bias in the survey — it was conducted on 4,018 people mainly in cities across 14 Indian states — where a reversal of economic fortunes is likely to be felt first. Thus slightly less than half the respondents see the situation improving over the next12 months.

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Last year, Pew Research found a majority of the polled Indians upbeat about the economy’s prospects, and the turnaround in perceptions follows a string of negative data. Gross domestic product has slowed to a growth rate of 6.5 % in 2011-12, from 8.4% the year before. All spheres of economic activity are feeling the squeeze: farm and factory output grew at nearly a third of the pace in 2010-11. The resilience of India’s service sector is cracking too. Growth in trade, hospitality, transport and communications is a percentage point lower, as it is in finance, insurance, real estate, and business services. It was also the second year the UPA surrendered the gains of growth to rising prices. Inflation in 2010-11 was 9.1% , tolerable when the economy was growing at 8.4%. In 2011-12, inflation at 8.5% was a full 2 percentage points higher than the GDP growth rate of 6.5%. It ranged from 7.4% in manufacturing to 8.8 % in agriculture and nearly 10% in some service sectors. Spirits are expectedly lower when real incomes of a big chunk of the population are declining.