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Consumer sentiment in India has improved post-demonetisation of ₹500/1,000 notes by the Central Government, according to a survey done by the Centre for Monitoring Indian Economy. Consumer sentiment, which was at 96.6 a week before the announcement, shot up in the week of the announcement to 98.7, before settling down just above 98.5 a week later, the survey found..
It also found that consumer sentiments were inversely proportion to household income; that is, the lower the income, the higher the sentiment. Consumer sentiment is a function of the current economic environment and consumer expectations.
Similarly, the unemployment rate reduced from 7.5 per cent a week before to 6.1 per cent in the week of the announcement before settling at 6.5 per cent a week after.
“We were doing this survey anyway. We were able to say what the consumer sentiment was before. Fortunately, November 8 was a Tuesday, and the week ends on a Sunday. So, we could capture the full effect of the announcement during that week,” said Mahesh Vyas, MD & CEO, Centre For Monitoring Indian Economy, at a BSE event in Mumbai on Thursday.
Gender bias in employmentThe survey found that labour participation among women was only 16.22 per cent, against 74.65 per cent for men. However, the unemployment rate among women was significantly higher at 24.62 per cent, against 6.18 per cent among men. “So, the very few women who are coming out to work are not finding jobs. Is this discrimination? Is this something that we need to worry about besides creating new jobs? The answer is yes. We do have gender problems in jobs,” Vyas observed.
The survey also found that the unemployment rate was higher for people who were younger — a trend which was prevalent all over the world.
“When fresh graduates come out of college, they take time to get jobs. The problem with India is that a large part of our population is young. Therefore, the unemployment challenge is actually larger because of the large bunch at the younger population. So, we need to work hard to create more jobs as these young men and women coming out need to find jobs quickly,” Vyas concluded.
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