The Reserve Bank of India (RBI) has played a pivotal role in determining and implementing monetary policies for the Indian economy. Its role has become even more critical given the current economic scenario marked by the widening trade deficit and a falling Rupee value. To better understand the economy’s standing, RBI has recently conducted seven surveys ranging from assessing consumer confidence to GDP growth expectations.
RBI Survey: An Overview
RBI’s latest initiative involves seven different surveys to assess the state of the Indian economy. These surveys cover various aspects like consumer confidence, inflation expectations, manufacturing sector conditions, industrial outlook, services and infrastructure companies’ sentiments, bank lending scenarios, and professional forecasts on macroeconomic indicators.
Consumer Confidence Survey (CCS)
The CCS gauges people’s perception (compared to a year ago) and expectations for the upcoming year on the general economic situation, employment, price situation, and their income and spending. The survey results showed a recent recovery in the Current Situation Index (CSI) from a historic low. However, the Future Expectations Index (FEI) stays below pre-pandemic levels, indicating cautious optimism.
Inflation Expectations Survey (IES)
Tracking people’s expectations about inflation, the IES showed households’ inflation perception for the current period has moderated by 80 bps to 9.3%.
OBICUS Survey
The Order Books, Inventories and Capacity Utilisation Survey aims to provide a snapshot of demand conditions in India’s manufacturing sector. A low level of Capacity Utilisation (CU) has negative implications for job creation and the chances for private sector investments in the economy. The survey findings suggest that India’s aggregate demand is slowly recovering.
Industrial Outlook Survey (IOS)
The IOS focuses on tracking business sentiments among Indian manufacturing companies providing a qualitative assessment of business conditions.
Services and Infrastructure Outlook Survey (SIOS)
The SIOS assesses how Indian companies in the services and infrastructure sectors view the current situation and the future prospects. The survey found companies in the services space more optimistic than those in the infrastructure sector.
Bank Lending Survey (BLS)
BLS tracks the mood of major scheduled commercial banks on credit parameters for significant economic sectors.
Survey of Professional Forecasters (SPF)
SPF is a survey of 42 professional forecasters on key macroeconomic indicators. The forecast for India’s real GDP growth is 7.1% in 2022-23, with the highest probability that GDP growth will range between 7%-7.4%.
The Current State of Trade Deficit & Indian Rupee
A trade deficit indicates that imports exceed exports. The first four months of FY 2022-23 saw this deficit exceeding 50% of the full-year deficit for FY 2021-22. The Indian Rupee, in comparison to the US Dollar, has fallen from Rs 74.2 in August 2021 to Rs 80 in July 2022.
Understanding The RBI’s Role
The role of the RBI involves not only determining monetary policy but also managing critical aspects of the economy, such as controlling inflation, managing the country’s foreign exchange, and act as a banker to other banks. The RBI’s objectives and functions are guided by the Reserve Bank of India Act, 1934. The Act provides the statutory basis of the functioning of the Bank, which commenced operations on April 1, 1935.
These surveys conducted by the RBI offer valuable insights into India’s economic landscape, guiding monetary policy decisions to ensure robust financial stability for the economy.
