Explained: What RBI’s surveys tell about India’s economy

Source: The post is based on the article “Explained: What RBI’s surveys tell about India’s economy” published in Indian Express on 10th August 2022.

What is the News?

RBI has released its latest Monetary Policy Review and Seven Surveys ranging from consumer confidence to GDP growth expectations. These surveys help in ascertaining how the economy is doing.

What are the surveys released by RBI?

Consumer Confidence Survey(CCS): It asks people across 19 cities about their current perceptions (in comparison with a year ago) and one-year ahead expectations on the general economic situation, employment scenario, overall price situation and own income and spending.

– Based on the responses, the RBI comes up with two indices: the Current Situation Index (CSI) and the Future Expectations Index (FEI).

Inflation Expectations Survey(IES): It tracks people’s expectations of Inflation.

OBICUS Survey: OBICUS stands for “Order Books, Inventories and Capacity Utilization Survey”. It covers several manufacturing companies in an attempt to provide a snapshot of demand conditions in India’s manufacturing sector.

– Note: A low level of Capacity Utilization(CU) implies that manufacturing firms can meet the existing demand without needing to boost production. This has negative implications for job creation and the chances for private sector investments in the economy.

Industrial Outlook Survey(IOS): It tries to track the sentiments of businessmen and businesswomen. It encapsulates a qualitative assessment of the business climate of Indian manufacturing companies.

Services and Infrastructure Outlook Survey (SIOS): It does a qualitative assessment of how Indian companies in the services and infrastructure sectors view the current situation and future prospects.

Bank Lending Survey(BLS): It captures the mood (qualitative assessment and expectations) of major scheduled commercial banks (SCBs) on credit parameters (loan demand and terms & conditions of loans) for major economic sectors.

Survey of Professional Forecasters (SPF): It is a survey of 42 professional forecasters (outside the RBI) on key macroeconomic indicators such as GDP growth rate and inflation rate in the current year and the next financial year.