The first thing to note in the first ‘Mood of the Nation’ poll of 2024 is a majority of those surveyed – 64%, “a substantial number of people” – report that their economic situation has deteriorated or remained the same in the past decade, under the Modi government’s seamless regime with a clear majority. Over one-third, 35%, say their situation has got worse relative to what what it was in 2014. This is one apiece with RBI’s consumer confidence surveys, which have been noting the despondent mood amongst those surveyed through the Modi government’s second term, starting from 2019, well before the pandemic.
The India Today Mood of the Nation poll, which brings out the economic discontent and restlessness vividly, was conducted by CVoter. The survey has 35,801 respondents, reached out through computer assisted telephone interviews (CATI) between December 15, 2023 and January 28, 2024, with the interviews covering all Lok Sabha segments across all states.
Unemployment “serious”: 71%
On unemployment, 71% say the situation is either “very serious” or “serious”. A whopping 54% of those surveyed say the jobs situation is “very serious”. Objective data on the state of unemployment, despite government denials, has pointed to a sad state of affairs, leading to even a controversial withholding of employment data five years ago, with the government agreeing to release the bad news only after the 2019 general elections were over. This led to two resignations from the National Statistical Commission.
The quality of jobs has also been a point of distress, with formal employment going down. State jobs or “bhartis” have been postponed for years on end with an entire generation preparing for ‘competitive examinations’ feeling left out and out of a job. The Armed Forces deciding to move towards an ‘Agniveer’ model of hiring soldiers, or short-term contract soldiering wholly replacing the idea of a soldier as a job providing respect, regular income and purpose has hit avenues for jobs for youngsters, with consequences in a demographic where the median age in India is around 30 years. Statista, (as there has been no Census since 2011) says it was a median of 32.4 years old in 2020, meaning that half the population is older than that, and the other half younger. Lower median ages need more job making. This figure was lowest in 1970, at 17.3 years, by the way.
“Current Household Expenses” out of whack
“Current household expenses are difficult to manage”, and this worries 62% of those surveyed. If you add those who worry about raised expenses but still say it is manageable (33%), this makes price rise a concern for 95% of those surveyed. This is the highest metric number logged for any question across the survey. A total of 66% say they don’t think their household incomes will rise. 30% feel it will deteriorate. Price inflation is the biggest failure of the Modi government, says 26% of the cohort surveyed.
As far as real numbers go, prices have been astronomical, and been well out of the RBI band of acceptable rates (between 4 to 6%) for some time now. In latest figures in for January, food inflation is still high, at 8.3% compared with 9.5% in December 2023. The retail inflation is at 5.1% in January, but has been hovering well above that; it was 5.7% a month earlier. For urban India, food inflation is at 9%. It was at 10.4% in December.
RBI’s consumer confidence surveys bear out the anxiety among households over inflation. The latest data, released on February 8, records that “majority of survey participants expect a rise in price and inflationary pressures especially for food product category for the three months horizon”. They say that “median inflation expectation for the three months ahead increased by 10 bps and stood at 9.2 per cent.”
RBI’s Michael Debabrata Patra had said in December 2023 that “inflation remains highly vulnerable to food price spikes, as the spurt in momentum in daily data on key food items for the month of November and early December reveal”. He emphasised that “households are already wary: although they expect inflation to remain unchanged three months ahead, they are more unsure about this prognosis than they were two months ago. Over the year ahead, however, they are more sure than in the past that inflation will likely rise.” Patra added, that “consumers too reveal more pessimism about inflation a year ahead than when they were surveyed in September”.
People say policies promote K-shaped growth
The survey brings out the belief in the past ten years that economic policies are being drawn up to help big business. A majority of people surveyed, 52%, say so. Only 9% think economic policies are benefitting farmers, 11% are of the view they support small business and only 8% say they benefit the salaried class.
The Modi government’s economic policies have ended up widening the gap between the rich and the poor, is the feeling of nearly half of those surveyed. About 45% feel that the gap has got wider.
An analysis by India Ratings and Research for FY22 and FY23, cited by India Today, “shows that wages for lower-income groups, comprising agricultural rural workers and unskilled workers, saw degrowth or negligible wage growth, if at all. In contrast, wages for corporates, representing the top 50 per cent of the income bracket, increased by over 10 per cent in the past two years.” The political landscape has been dominated by conversation over one business house, the Adani Group’s rapid growth, which continued also through the pandemic, far outstripping the rate of growth in India and also growth of its peers in the business community.
Big corporations as a group have benefitted from Union government’s policies, says a look at taxes paid by them, as compared to what individuals pay. The government has been boasting about this. The government data, as released by the Central Board of Direct Taxes, or CBDT says that the number of tax payers filing income tax returns has more than doubled to 7.78 crore in the past 10 years. But this ‘data’ conceals a bigger story that has implications on economic equality statistics.
It is only thrice since the 1990s that individuals have paid more than corporations as tax. The first was in 1991-92, then in 2020-21 and now. Economic commentator Vivek Kaul cites aggregate data of 35,000 companies sourced from the Centre for Monitoring Indian Economy (CMIE) which “suggests that profit-before-tax (PBT) of these companies went up 144% between 2018-19 and 2021-22. Plus, the tax provisions went up just 39%, helping push up profit-after-tax (PAT) by 244%.” The government had cut corporate tax rate in September 2019.
He also points out to how this inhibits private consumption growth in 2023-24, which is expected to be 4.4%, the slowest since 2002-03, except for the pandemic year. As private consumption forms 57% of the Indian economy, the government could have slashed personal income tax rates in the interim budget, and encouraged people to spend more and drive consumption. But with the fall in corporate tax collections, it cannot do that. There is a huge and continued cess on petrol and fuel, despite a long span when oil prices were at record low levels, as none of the benefits were passed on to consumers. This is also an indirect, regressive tax, hurting those at the lower end of the income scale more acutely.
Going by the ‘Mood of the Nation’, the people have caught on to how policies are hurting those at the bottom of the scale disproportionately.
The Chief Economic Advisor, V. Anantha Nageswaran says today in a piece in Mint, “By May, we will have learnt that India’s economy has grown by more than 7% annually in real terms over the last three years.”
