Economists may bicker about whether the slowdown in the economy is just a blip or cyclical or structural, politicians may spar over it, but whatever the case, consumers are getting gloomier and gloomier with every passing quarter. That is the message from the Reserve Bank of India’s Consumer Confidence Survey for September 2017.

As the chart shows, the consumer confidence index based on the current perception of the economy is at its lowest since December 2013. Similarly, the index for one-year-ahead expectations is at its lowest since December 2014.

The chart shows the consumer confidence index for current perceptions was doing very well till November last year, until the full force of demonetisation landed on the consumer. It recovered a bit in May 2017, but slipped again, perhaps felled by the goods and services tax (GST) this time.

The index for one-year-ahead expectations peaked in December 2016, in the middle of the demonetisation exercise, which is rather bizarre, but perhaps people bought into the story that demonetisation would make things better. Or, more likely, they thought that after suffering such a huge shock, the economy could only improve from that point. But after May 2017, that fond hope too disappeared.

This Consumer Confidence Survey is conducted in six metropolitan cities—Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi. If sentiment is so bad in metropolitan India, which has the businesses and households best able to withstand economic shocks, things are likely to be worse in other parts of the country.

We’ll probably soon see a bounce in the economy as the initial GST disruption wears off and consumer sentiment may perk up again.

The government has two alternatives: it could take a cue from the immortal words of the Monty Python song, Always Look on the Bright Side of Life; alternatively, it could do something to cheer up consumers. Perhaps the cut in petrol prices is a small step towards that objective.

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