Consumer expectations and the budget

Consumer expectations are running low in India

Tomorrow, the finance minister will present the Union Budget for 2017-18. Most macroeconomic analysts will try to find signs of the government increasing outlays with a hope of spurring consumption demand. They would do well to first find if consumers are indeed in any mood to increase spending at all.

If you put additional monies into the hands of consumers they will not always go out and spend and spur consumption demand. Even if it is a direct bank transfer, it will generate a lot of good press but, in the current circumstances, it is unlikely to spur consumer demand.