Indians' faith in economy falters

Hyderabad: In what could make things difficult for the Narendra Modi government, a significant number of Indians have reportedly lost confidence in the economy, as it faces a twin onslaught by appreciating dollar and crude oil.

According to a survey done by Pew Research Center, 56 per cent of respondents thought the economy was doing well this year compared to 83 per cent in 2017 — that’s a steep fall of 27 per cent.

Among 27 countries surveyed by Pew, India has seen the steepest fall in the confidence followed by Tunisia (a fall of 11 per cent) and South Africa (a fall of 10 per cent).

The survey was conducted between May 14 and August 12, 2018. This was the period when the problems in form of the rupee and petrol did not accentuate for the economy. The dollar was priced Rs 68.43 on the last day of the survey as against Rs 72.37 on Wednesday. Petrol was still Rs 77.23 and diesel Rs 68.77 on August 12 as against 82.16 for petrol and 73.87 for diesel.

The Indian economy has been facing headwinds following appreciation of dollar and crude oil, which led to flight of capital and a resultant weakening of the rupee.

The government is under tremendous pressure from people to slash the rising petrol and diesel prices as they eating into their monthly budgets. Though the government did not give in to the demands as it could lead to higher fiscal deficit and a chain of undesirable consequences,  any decline in confidence among people about the the economy in an election year would not good for the ruling party.

The survey also adds that current economic perceptions are often filtered through a partisan lens based on who is in power and the respondent’s political leanings.

In India, 72 per cent of those support the ruling party continued to feel that the economy is doing well, while only 48 per cent of those who oppose the ruling party have confidence in the current state of the Indian economy.

However, a majority of Indians — 66 per cent — feel that the economy is in a better shape than what it was in 1990s. Only 15 per cent feel that the financial situation was much better in the country than now.

They also believe in the country’s growth story in the long term. Over 65 per cent believe that their children would be better off than them.