Chart of the Day: RBI survey shows festival spending may not shine much

On Friday, Reserve Bank of India Governor Shaktikanta Das expressed hope that this festival season would see some big spending by Indians. “There is a sustained revival in urban demand which should get a further impetus from unfettered celebration of upcoming festivals after two and half years of living with COVID-19,” he said. But as the above chart shows, the RBI’s own survey of consumers doesn’t paint a good picture on spending. Granted, Indians are less pessimistic than before on spending with the net response on overall spending showing marginal improvement. That said, festival season is all about discretionary spending. Here, Indians are still pessimistic. The net response is a negative 3.6 percent which means pessimistic consumers are more than optimistic ones. Overall sentiment towards spending remains cautious as more than a third of Indians are still wary of their prospects. The ongoing festival season may be far better than during the pandemic but it still is far from sanguine.