Eco Survey points to significant slowdown in private consumption

Drop in real disposable income of households, high inflation and high interest rates attributed to slowdown

The just-released Economic Survey for the financial year 2012-13 shows a drop in domestic private final consumption to 4.1% from 8% last year. Likely reasons for the slowdown, says the survey, has been a drop in real disposable income of households thanks to inflation and high interest rates.

The survey also points to a slowdown in the rate of growth of production of consumer durables, private vehicles and other consumer goods as consumers restrained purchases. Rate of growth of production of consumer durables, for instance, declined from 12.2% in April to November 2011 to 3.3% in the first eight months of the current fiscal. The rate of growth of production of private vehicles, on the other hand, declined 23.2% in April-November 2011 to -5.6% in the corresponding period this year.