Inflation Expectations Survey of
Households: March 2012
(Round 27)*
The findings of 27th round of inflation Expectations
Survey of Households for the January-March 2012
quarter, conducted during February 27 to March 9,
2012 are presented here. The survey captures the inflation
expectations of 4,000 urban households across 12 cities
for the next three-month and for the next one-year. These
expectations are based on their individual consumption
baskets and, hence, these rates should not be considered
as predictors of any official measure of inflation. The
households’ inflation expectations provide an useful
directional information on near-term inflationary
pressures and also supplement other economic indicators
to get a better indication of future inflation. The survey
results are those of the respondents and are not necessarily
shared by the Reserve Bank.
The percentage of respondents expecting price rise
in the next three months and in the next one year have
gone up, mainly influenced by movements in food prices.
However, the three-months ahead and one-year ahead
inflation expectations at 11.7 per cent and 12.5 per
cent, exhibit marginal moderation by 70-80 basis points
as compared with the last round of the survey. Perception
of the current inflation has also declined by 90 basis
points as compared with the previous round. However,
three-month and one-year ahead inflation expectations
are higher than the perceived current inflation rate
by 70 and 150 basis points, respectively. As in the past
rounds, daily-wage workers and housewives expect higher
inflation rates compared with other categories. On the
aspect of awareness, 27.3 per cent of the respondents
felt that the Reserve Bank is taking necessary action to
control inflation, of which, 49.9 per cent felt that the
Reserve Bank’s action is effective.
I. Introduction
The Reserve Bank of India has been conducting
inflation expectations survey of households (IESH) on a quarterly basis, since September 2005. The survey
elicits qualitative and quantitative responses for threemonth
ahead and one-year ahead period on expected
price changes and inflation. inflation expectations of
households (HHs) are subjective assessments and are
based on their individual consumption baskets and
therefore, may be different from the official inflation
numbers released periodically by the government.
Again, they may not be treated as forecast of any
official measure of inflation, though these inflation
expectations provide useful inputs on directional
movements of future inflation.
II. Sample Coverage and Information
Sought
The survey is conducted simultaneously in 12
cities that cover adult respondents of 18 years and
above. The major metropolitan cities, viz., Delhi,
Kolkata, Mumbai and Chennai are represented by
500 households each, while another eight cities, viz.,
Jaipur, Lucknow, Bhopal, Ahmedabad, Patna, Guwahati,
Bangalore and Hyderabad are represented by 250
households each. The respondents having a view on
perceived current inflation are well spread across
the cities to provide a good geographical coverage.
The male and female respondents in the group are
approximately in the ratio of 3:2. The sample coverage
in terms of occupational category-wise representation
is nearly as per the target (Table 1).
The survey schedule is organised into seven
blocks covering the respondent profile (block 1),
general and product-wise price expectations (block
2 and 3), feedback on the Reserve Bank’s action to
control inflation (block 4), current and expected
inflation rate (block 5), amount paid for the purchase
of major food items during last one month (block 6)
and the expectations on changes in income/wages
(block 7).
The response options for price changes are
(i) price increase more than current rate, (ii) price increase similar to current rate, (iii) price increase
less than current rate, (iv) no change in prices and
(v) decline in prices. The inflation rates are collected
in intervals – the lowest being ‘less than 1 per cent’
and the highest being ‘16 per cent and above’ with 100
basis point size for all intermediate classes.
Table 1: Respondents’ Profile (Category):
Share in Total Sample |
Category of Respondents |
Share in Total (%) |
Target Share (%) |
Financial Sector Employees |
8.8 |
10.0 |
Other Employees |
15.6 |
15.0 |
Self-employed |
20.9 |
20.0 |
Housewives |
30.0 |
30.0 |
Retired Persons |
9.6 |
10.0 |
Daily Workers |
8.8 |
10.0 |
Other Category |
6.3 |
5.0 |
Note: The above sample proportion is for the quarter ended March 2012 survey |
III. Survey Results
III.1 General Price Expectations
-
The percentages of respondents expecting price
increase in three-month ahead and one-year
ahead show marginal increase over previous round and stand at over 98 per cent in the present
survey round.
-
The percentage of respondents expecting
increase in general prices by ‘more than the
current rate’ for three-month ahead and one-year
ahead period have gone up to 75.6 per cent and
78.8 per cent, respectively, from 73.4 per cent
and 76.9 per cent in the previous round (October-
December 2011) (Table 2.1).
III.2 Product Group-wise Price Expectations
-
Product group-wise price expectations reflect
similar trends, i.e., the percentage of respondents
expecting price increase in three-month ahead
and in one-year ahead period have gone up visà-
vis the last round for food products, non-food
products, household durables, housing and cost
of services (Table 2.2, 2.3, 2.4, 2.5 and 2.6).
-
However, proportion of households expecting
price increase three-month ahead by ‘more than
the current rate’ has declined to some extent for
food products, non-food products and household
durables. In contrast, there is significant increase
in proportion of respondents expecting a rise in prices at ‘similar to current rate’ in respect of
above identified product group.
Table 2: Percentage of Respondents – Product-wise Expectations of Prices for
Three-month Ahead and One-year Ahead |
Round No./survey period (quarter ended)→ |
18 |
19 |
20 |
21 |
22 |
23 |
24 |
25 |
26 |
27 |
Dec-09 |
Mar-10 |
Jun-10 |
Sep-10 |
Dec-10 |
Mar-11 |
Jun-11 |
Sep-11 |
Dec-11 |
Mar-12 |
Table 2.1: General |
|
Options |
Three-month ahead (percentage of respondents) |
Prices will increase |
97.4 |
95.7 |
95.3 |
96.5 |
98.6 |
96.0 |
98.7 |
97.3 |
96.1 |
98.2 |
Price increase more than current rate |
74.6 |
66.9 |
72.7 |
72.2 |
74.3 |
72.9 |
71.8 |
75.8 |
73.4 |
75.6 |
Price increase similar to current rate |
16.6 |
20.0 |
20.0 |
21.0 |
22.0 |
20.4 |
19.8 |
15.4 |
13.2 |
15.9 |
Price increase less than current rate |
6.2 |
8.8 |
2.6 |
3.3 |
2.3 |
2.7 |
7.1 |
6.0 |
9.6 |
6.7 |
No change in prices |
2.4 |
3.4 |
4.2 |
2.9 |
1.1 |
3.5 |
1.2 |
2.2 |
3.0 |
1.6 |
Decline in price |
0.3 |
0.9 |
0.5 |
0.6 |
0.4 |
0.5 |
0.1 |
0.6 |
0.9 |
0.2 |
Options |
One-year ahead (percentage of respondents) |
Prices will increase |
96.3 |
96.5 |
95.2 |
95.6 |
98.9 |
96.1 |
98.7 |
96.0 |
97.1 |
98.3 |
Price increase more than current rate |
68.2 |
62.8 |
70.8 |
70.4 |
77.4 |
73.4 |
73.3 |
73.5 |
76.9 |
78.8 |
Price increase similar to current rate |
15.2 |
19.8 |
18.7 |
19.7 |
17.9 |
18.6 |
18.0 |
16.7 |
12.6 |
14.0 |
Price increase less than current rate |
12.9 |
13.9 |
5.7 |
5.6 |
3.6 |
4.2 |
7.4 |
5.9 |
7.6 |
5.5 |
No change in prices |
3.1 |
2.6 |
3.8 |
3.5 |
0.9 |
3.5 |
1.3 |
3.3 |
2.5 |
1.6 |
Decline in price |
0.6 |
0.9 |
1.1 |
0.9 |
0.3 |
0.3 |
0.0 |
0.7 |
0.4 |
0.1 |
Table 2: Percentage of Respondents – Product-wise Expectations of Prices for
Three-month Ahead and One-year Ahead (Contd.) |
Round No./survey period (quarter ended)→ |
18 |
19 |
20 |
21 |
22 |
23 |
24 |
25 |
26 |
27 |
Dec-09 |
Mar-10 |
Jun-10 |
Sep-10 |
Dec-10 |
Mar-11 |
Jun-11 |
Sep-11 |
Dec-11 |
Mar-12 |
Table 2.2: Food Products |
|
Options |
Three-month ahead (percentage of respondents) |
Prices will increase |
98.0 |
95.9 |
95.8 |
96.7 |
98.1 |
95.4 |
98.6 |
97.3 |
95.3 |
98.2 |
Price increase more than current rate |
81.1 |
70.4 |
74.9 |
74.7 |
73.1 |
69.4 |
72.0 |
74.2 |
70.4 |
69.8 |
Price increase similar to current rate |
11.7 |
15.5 |
17.7 |
18.0 |
21.3 |
21.0 |
17.5 |
17.2 |
16.7 |
21.2 |
Price increase less than current rate |
5.3 |
10.0 |
3.2 |
4.0 |
3.7 |
5.1 |
9.1 |
5.9 |
8.2 |
7.2 |
No change in prices |
1.4 |
3.1 |
3.5 |
2.3 |
1.4 |
3.8 |
1.2 |
1.9 |
3.4 |
1.6 |
Decline in price |
0.6 |
1.0 |
0.7 |
1.0 |
0.6 |
0.8 |
0.2 |
0.9 |
1.3 |
0.3 |
Options |
One-year ahead (percentage of respondents) |
Prices will increase |
96.5 |
96.8 |
95.6 |
95.7 |
98.6 |
95.9 |
98.6 |
95.8 |
96.8 |
98.2 |
Price increase more than current rate |
72.1 |
65.9 |
72.8 |
71.7 |
76.4 |
75.5 |
73.6 |
72.0 |
73.7 |
74.4 |
Price increase similar to current rate |
11.9 |
16.5 |
16.9 |
17.8 |
17.8 |
16.6 |
17.2 |
19.0 |
15.8 |
18.6 |
Price increase less than current rate |
12.5 |
14.5 |
5.9 |
6.2 |
4.4 |
3.9 |
7.9 |
4.8 |
7.4 |
5.2 |
No change in prices |
2.7 |
2.3 |
3.3 |
3.2 |
1.1 |
3.6 |
1.3 |
3.3 |
2.7 |
1.7 |
Decline in price |
0.9 |
0.9 |
1.1 |
1.1 |
0.4 |
0.5 |
0.1 |
0.9 |
0.5 |
0.2 |
Table 2.3: Non-Food Products |
|
Options |
Three-month ahead (percentage of respondents) |
Prices will increase |
95.8 |
94.0 |
92.9 |
95.4 |
95.9 |
95.0 |
98.0 |
95.6 |
94.3 |
97.5 |
Price increase more than current rate |
63.1 |
57.4 |
60.1 |
64.4 |
58.8 |
58.4 |
65.6 |
67.1 |
66.1 |
63.7 |
Price increase similar to current rate |
24.8 |
28.0 |
29.4 |
27.3 |
33.2 |
31.3 |
25.0 |
21.5 |
18.3 |
24.3 |
Price increase less than current rate |
7.9 |
8.7 |
3.4 |
3.7 |
3.9 |
5.3 |
7.4 |
7.0 |
9.9 |
9.5 |
No change in prices |
3.7 |
4.8 |
6.3 |
3.9 |
0.5 |
4.4 |
1.9 |
3.8 |
4.9 |
2.4 |
Decline in price |
0.5 |
1.2 |
0.9 |
0.7 |
0.7 |
0.6 |
0.1 |
0.7 |
0.9 |
0.2 |
Options |
One-year ahead (percentage of respondents) |
Prices will increase |
94.6 |
94.7 |
92.8 |
94.6 |
97.5 |
94.7 |
97.8 |
95.2 |
96.2 |
98.1 |
Price increase more than current rate |
60.7 |
53.0 |
59.7 |
64.0 |
65.2 |
59.9 |
66.9 |
66.4 |
67.5 |
68.5 |
Price increase similar to current rate |
20.7 |
27.6 |
26.4 |
24.9 |
28.1 |
29.2 |
24.0 |
22.7 |
20.8 |
22.6 |
Price increase less than current rate |
13.2 |
14.1 |
6.7 |
5.7 |
4.2 |
5.6 |
7.0 |
6.1 |
8.0 |
7.0 |
No change in prices |
4.6 |
4.2 |
5.9 |
4.4 |
2.2 |
4.6 |
2.0 |
4.1 |
3.3 |
1.9 |
Decline in price |
0.8 |
1.1 |
1.3 |
1.0 |
0.4 |
0.7 |
0.1 |
0.8 |
0.5 |
0.1 |
Table 2.4: Household Durables |
|
Options |
Three-month ahead (percentage of respondents) |
Prices will increase |
87.7 |
86.4 |
87.1 |
89.7 |
91.9 |
90.4 |
91.7 |
91.0 |
86.9 |
90.0 |
Price increase more than current rate |
45.5 |
44.1 |
45.1 |
45.8 |
45.5 |
47.0 |
49.0 |
50.5 |
53.6 |
50.7 |
Price increase similar to current rate |
23.4 |
27.2 |
30.5 |
32.9 |
28.9 |
28.0 |
30.6 |
26.4 |
19.5 |
25.7 |
Price increase less than current rate |
18.9 |
15.1 |
11.6 |
11.0 |
17.5 |
15.4 |
12.1 |
14.1 |
13.8 |
13.6 |
No change in prices |
9.5 |
8.8 |
9.1 |
6.3 |
5.9 |
5.9 |
6.7 |
5.8 |
10.8 |
8.5 |
Decline in price |
2.9 |
4.8 |
3.8 |
4.1 |
2.4 |
3.8 |
1.7 |
3.3 |
2.3 |
1.5 |
Options |
One-year ahead (percentage of respondents) |
Prices will increase |
87.8 |
85.2 |
87.2 |
89.0 |
94.4 |
91.3 |
92.8 |
91.5 |
90.6 |
91.9 |
Price increase more than current rate |
45.5 |
43.2 |
46.6 |
46.3 |
48.6 |
49.6 |
52.0 |
52.2 |
54.6 |
52.4 |
Price increase similar to current rate |
22.1 |
25.4 |
30.1 |
31.8 |
32.5 |
29.0 |
25.7 |
26.0 |
22.6 |
25.7 |
Price increase less than current rate |
20.3 |
16.6 |
10.6 |
11.0 |
13.3 |
12.8 |
15.1 |
13.3 |
13.4 |
13.8 |
No change in prices |
8.5 |
9.6 |
8.0 |
6.7 |
3.8 |
5.7 |
5.4 |
6.2 |
7.8 |
7.0 |
Decline in price |
3.7 |
5.3 |
4.8 |
4.3 |
1.9 |
3.0 |
1.9 |
2.3 |
1.7 |
1.2 |
Table 2: Percentage of Respondents – Product-wise Expectations of Prices for
Three-month Ahead and One-year Ahead (Concld.) |
Round No./survey period (quarter ended)→ |
18 |
19 |
20 |
21 |
22 |
23 |
24 |
25 |
26 |
27 |
Dec-09 |
Mar-10 |
Jun-10 |
Sep-10 |
Dec-10 |
Mar-11 |
Jun-11 |
Sep-11 |
Dec-11 |
Mar-12 |
Table 2.5: Housing Prices |
|
Options |
Three-month ahead (percentage of respondents) |
Prices will increase |
96.1 |
95.2 |
96.1 |
96.0 |
97.0 |
94.5 |
95.2 |
97.0 |
95.5 |
96.3 |
Price increase more than current rate |
70.8 |
60.4 |
70.8 |
64.6 |
73.1 |
73.5 |
65.4 |
73.5 |
67.4 |
70.4 |
Price increase similar to current rate |
19.8 |
25.4 |
21.0 |
24.8 |
21.3 |
18.3 |
23.5 |
18.2 |
18.2 |
19.5 |
Price increase less than current rate |
5.6 |
9.5 |
4.3 |
6.7 |
2.6 |
2.7 |
6.4 |
5.4 |
10.0 |
6.4 |
No change in prices |
3.4 |
3.5 |
3.1 |
2.8 |
2.1 |
4.7 |
4.5 |
2.2 |
3.8 |
3.3 |
Decline in price |
0.5 |
1.3 |
0.9 |
1.2 |
0.9 |
0.8 |
0.3 |
0.8 |
0.7 |
0.4 |
Options |
One-year ahead (percentage of respondents) |
Prices will increase |
96.4 |
94.1 |
96.1 |
95.3 |
97.9 |
94.8 |
97.6 |
95.8 |
96.1 |
97.7 |
Price increase more than current rate |
73.4 |
61.0 |
72.0 |
65.9 |
75.5 |
72.1 |
70.4 |
70.2 |
67.3 |
73.4 |
Price increase similar to current rate |
15.1 |
21.7 |
19.1 |
21.6 |
19.4 |
20.1 |
21.7 |
20.0 |
20.6 |
19.3 |
Price increase less than current rate |
7.9 |
11.4 |
5.0 |
7.9 |
3.0 |
2.7 |
5.6 |
5.6 |
8.2 |
5.0 |
No change in prices |
2.9 |
4.6 |
2.7 |
3.2 |
1.4 |
4.6 |
2.0 |
3.3 |
3.5 |
2.1 |
Decline in price |
0.7 |
1.3 |
1.2 |
1.5 |
0.8 |
0.6 |
0.4 |
0.9 |
0.5 |
0.3 |
Table 2.6: Cost of Services |
|
Options |
Three-month ahead (percentage of respondents) |
Prices will increase |
91.7 |
89.9 |
94.1 |
94.2 |
94.1 |
91.6 |
96.2 |
95.3 |
91.9 |
95.8 |
Price increase more than current rate |
62.7 |
58.6 |
63.2 |
59.2 |
61.4 |
62.1 |
61.0 |
68.1 |
58.7 |
67.3 |
Price increase similar to current rate |
21.2 |
23.9 |
26.2 |
28.6 |
28.9 |
26.4 |
26.2 |
20.3 |
21.2 |
20.3 |
Price increase less than current rate |
7.8 |
7.5 |
4.8 |
6.4 |
3.8 |
3.1 |
9.1 |
6.8 |
12.1 |
8.2 |
No change in prices |
7.0 |
6.7 |
4.8 |
5.2 |
4.5 |
7.7 |
3.8 |
4.0 |
7.4 |
4.0 |
Decline in price |
1.4 |
3.4 |
1.1 |
0.6 |
1.4 |
0.7 |
0.0 |
0.8 |
0.7 |
0.3 |
Options |
One-year ahead (percentage of respondents) |
Prices will increase |
92.3 |
89.9 |
94.2 |
94.3 |
95.2 |
91.2 |
97.3 |
95.2 |
93.6 |
97.1 |
Price increase more than current rate |
62.9 |
57.2 |
63.2 |
58.0 |
64.6 |
62.6 |
62.7 |
66.3 |
65.3 |
69.6 |
Price increase similar to current rate |
18.5 |
23.0 |
24.9 |
29.5 |
25.7 |
24.4 |
25.3 |
23.4 |
18.6 |
19.8 |
Price increase less than current rate |
10.9 |
9.8 |
6.1 |
6.8 |
4.9 |
4.2 |
9.3 |
5.4 |
9.8 |
7.7 |
No change in prices |
6.0 |
6.9 |
4.6 |
4.9 |
4.1 |
8.2 |
2.6 |
4.2 |
5.9 |
2.8 |
Decline in price |
1.8 |
3.2 |
1.2 |
0.9 |
0.7 |
0.7 |
0.1 |
0.7 |
0.5 |
0.2 |
III.3 Coherence between General and Product
Group-wise Price Expectations
-
As in the past rounds, the general price
expectations are observed to be consistently
aligned with food price expectations than with
other product groups. On an average, around 90
per cent of the respondents appeared to have
been driven mostly by expected changes in food
prices for arriving at general price expectations
(Table 3 and Table 4).
-
Further, sharp increase in coherence between
general price expectations and that of housing
and cost of services product groups are observed
in the current survey round as compared with
previous round. The association of general
price expectation was consistently lower with
household durables prices (Table 3 and Table 4).
Table 3: Percentage of Respondents Expecting
General Price Movements in Coherence with
Movements in Price Expectations of Various
Product Groups: Three-month Ahead |
(percentage of respondents) |
Round
No. |
Survey
Quarter
ended |
Food |
Non-
Food |
Household
Durables |
Housing |
Cost of
services |
18 |
Dec-09 |
88.3 |
83.6 |
62.3 |
82.7 |
79.3 |
19 |
Mar-10 |
87.4 |
81.4 |
66.5 |
78.1 |
76.6 |
20 |
Jun-10 |
89.9 |
82.4 |
63.6 |
80.2 |
80.8 |
21 |
Sep-10 |
91.4 |
86.1 |
64.8 |
79.2 |
76.7 |
22 |
Dec-10 |
92.3 |
77.3 |
58.9 |
82.5 |
76.6 |
23 |
Mar-11 |
85.5 |
78.9 |
62.5 |
82.5 |
76.4 |
24 |
Jun-11 |
88.5 |
83.0 |
68.1 |
80.4 |
80.0 |
25 |
Sep-11 |
88.8 |
86.2 |
68.0 |
84.4 |
85.2 |
26 |
Dec-11 |
87.9 |
82.4 |
67.6 |
74.4 |
74.7 |
27 |
Mar-12 |
87.7 |
82.7 |
65.4 |
84.1 |
83.7 |
Table 4: Percentage of Respondents Expecting
General Price Movements in Coherence with
Movements in Price Expectations of Various
Product Groups: One-year Ahead |
(percentage of respondents) |
Round
No. |
Survey
Quarter
ended |
Food |
Non-
Food |
Household
Durables |
Housing |
Cost of
services |
18 |
Dec-09 |
91.1 |
88.4 |
69.0 |
82.8 |
79.3 |
19 |
Mar-10 |
89.9 |
83.6 |
67.3 |
79.7 |
76.2 |
20 |
Jun-10 |
91.7 |
83.2 |
67.2 |
79.4 |
81.1 |
21 |
Sep-10 |
93.4 |
88.0 |
66.8 |
81.0 |
76.3 |
22 |
Dec-10 |
91.7 |
83.5 |
62.4 |
83.0 |
83.0 |
23 |
Mar-11 |
89.8 |
81.6 |
68.1 |
82.4 |
80.6 |
24 |
Jun-11 |
94.8 |
86.6 |
70.4 |
81.6 |
81.6 |
25 |
Sep-11 |
92.4 |
87.2 |
71.1 |
85.7 |
86.3 |
26 |
Dec-11 |
92.3 |
84.5 |
68.0 |
78.1 |
81.2 |
27 |
Mar-12 |
91.8 |
84.0 |
65.7 |
83.9 |
85.9 |
III.4 Inflation Expectations
-
The three-month ahead and one-year ahead
inflation expectations based on mean inflation
rate reported by 4,000 households have moved
down to 11.7 per cent and 12.5 per cent, respectively, from 12.4 per cent and 13.3 per cent
in the last round (Table 5, Chart 1).
-
The current perceived, three-month ahead and
one-year ahead expected inflation have decreased
by 90, 70 and 80 basis points, respectively, vis-àvis
corresponding average rates reported in the
previous round.
-
Households expect inflation to rise further
by 70 and 150 basis points during next threemonth
and next one-year, respectively, from the
perceived current rate of 11.0 per cent.
-
For a large part of the survey history, the
households’ perceived current inflation rate
remained between the WPI and CPI-IW inflation
rates. However, from September 2010 round of
the survey onwards, the same is higher than the
official inflation rates (Chart 2).
-
Based on 10,000 re-samples using simple
random sampling with replacement, the 99 per
cent bootstrap confidence intervals provide an
indication of the precision of point estimates
for the population mean inflation expectations
(Table 6).
Table 5: Household Inflation Expectations – Current,
Three-month Ahead and One-year Ahead |
Survey
Round |
Survey
Quarter ended |
Three-month
Expectation period |
Inflation Rate in Per cent |
Current |
Three-month ahead |
One-year ahead |
15 |
Mar-09 |
Apr-Jun 09 |
5.2 |
5.3 |
6.2 |
16 |
Jun-09 |
Jul-Sep 09 |
5.8 |
6.3 |
6.7 |
17 |
Sep-09 |
Oct-Dec 09 |
8.2 |
8.7 |
9.2 |
18 |
Dec-09 |
Jan-Mar 10 |
11.1 |
11.6 |
11.9 |
19 |
Mar-10 |
Apr-Jun 10 |
10.3 |
10.6 |
11.0 |
20 |
Jun-10 |
Jul-Sep 10 |
11.1 |
11.4 |
11.9 |
21 |
Sep-10 |
Oct-Dec 10 |
12.1 |
12.3 |
12.7 |
22 |
Dec-10 |
Jan-Mar 11 |
11.8 |
12.4 |
13.1 |
23 |
Mar-11 |
Apr-Jun 11 |
11.5 |
11.9 |
12.7 |
24 |
Jun-11 |
Jul-Sep 11 |
11.2 |
11.8 |
12.9 |
25 |
Sep-11 |
Oct-Dec 11 |
11.7 |
12.2 |
12.9 |
26 |
Dec-11 |
Jan-Mar 12 |
11.9 |
12.4 |
13.3 |
27 |
Mar-12 |
Apr-Jun 12 |
11.0 |
11.7 |
12.5 |
Table 6: 99% Bootstrap Confidence Intervals (BCI)
based on 10,000 Resamples |
Current |
Three-month ahead |
One-year ahead |
99% BCI for
Mean |
Interval
width |
99% BCI for
Mean |
Interval
width |
99% BCI for
Mean |
Interval
width |
(10.81, 11.15) |
0.34 |
(11.50,11.82) |
0.32 |
(12.32,12.63) |
0.31 |
III.5 Variations in Responses
- Over different rounds of the survey, the variations
in the responses in terms of standard deviation
were generally observed to be lower for the
perceived current inflation rate as compared with
the expectations. However, in the current and
previous rounds of the survey, the variations in
perceived current rate are observed to be higher
than that in the expectations (Table 7).
Table 7: Variability in Responses in Various Rounds |
Round
No. |
Survey
Quarter ended |
Inflation rate |
Current |
Three-month
Ahead |
One-year
Ahead |
Mean |
Std. Dev. |
Mean |
Std. Dev. |
Mean |
Std. Dev. |
17 |
Sep-09 |
8.2 |
6.0 |
8.7 |
6.0 |
9.2 |
5.9 |
18 |
Dec-09 |
11.1 |
4.9 |
11.6 |
4.9 |
11.9 |
5.1 |
19 |
Mar-10 |
10.3 |
4.4 |
10.6 |
4.7 |
11.0 |
4.8 |
20 |
Jun-10 |
11.1 |
3.6 |
11.4 |
4.1 |
11.9 |
4.2 |
21 |
Sep-10 |
12.1 |
3.2 |
12.3 |
3.6 |
12.7 |
3.8 |
22 |
Dec-10 |
11.8 |
3.5 |
12.4 |
3.7 |
13.1 |
3.6 |
23 |
Mar-11 |
11.5 |
3.1 |
11.9 |
3.7 |
12.7 |
3.6 |
24 |
Jun-11 |
11.2 |
3.4 |
11.8 |
3.3 |
12.9 |
3.3 |
25 |
Sep-11 |
11.7 |
3.1 |
12.2 |
3.4 |
12.9 |
3.7 |
26 |
Dec-11 |
11.9 |
3.5 |
12.4 |
3.4 |
13.3 |
3.4 |
27 |
Mar-12 |
11.0 |
4.1 |
11.7 |
3.9 |
12.5 |
3.8 |
-
Variation in consumption baskets and thereby the
variability in responses for inflation expectations
may partly be explained by different classificatory
factors (viz., gender, age-group, city and category)
of respondents over different rounds.
- An Analysis of Variance (ANOVA) carried out over
different rounds revealed that ‘city’ has always
been a significant source of variation in each round
followed by occupational ‘category’. In current
round, ‘gender’ is also observed to be another
significant source of variation (Table 8).
Table 8: Factors that Explain the Total Variability |
Round
No. |
Survey
Quarter
ended |
Current |
Three-month
Ahead |
One-year
Ahead |
17 |
Sep-09 |
City, Age |
City, Age |
City, Age |
18 |
Dec-09 |
City, Category, Age |
City, Age |
City |
19 |
Mar-10 |
City, Category, Age |
City, Category |
City, Category |
20 |
Jun-10 |
City, Category, Age |
City, Category, Age |
City, Category, Age |
21 |
Sep-10 |
City, Gender, Category, Age |
City, Gender, Category |
City, Category |
22 |
Dec-10 |
City, Category |
City, Category |
City, Category |
23 |
Mar-11 |
City, Category |
City, Category |
City, Category, Age |
24 |
Jun-11 |
City, Category |
City, Category |
City, Category |
25 |
Sep-11 |
City, Gender, Category |
City, Category |
City, Gender, Category |
26 |
Dec-11 |
City, Category |
City, Category |
City, Category |
27 |
Mar-12 |
City, Gender, Category |
City, Gender, Category |
City, Gender, Category |
Note: Results based on exercise using Analysis of Variance. |
-
Survey shows that housewives and daily workers
tend to have marginally higher level of inflation
expectations. No visible pattern emerged from
age-wise profile of respondents (Table 9).
-
City-wise, inflation expectations were found to be
the highest in Bangalore and the lowest in Bhopal
(Table 9).
Table 9: Various Group-wise Inflation Expectations for March 2012 Survey Round |
| |
Current |
Three-month Ahead |
One-year Ahead |
Mean |
Std. Dev |
Mean |
Std. Dev |
Mean |
Std. Dev |
Gender-wise |
|
|
|
|
|
|
Male |
10.7 |
4.1 |
11.4 |
3.9 |
12.3 |
3.7 |
Female |
11.4 |
4.0 |
12.0 |
3.7 |
12.7 |
3.8 |
Category-wise |
|
|
|
|
|
|
Financial Sector Employees |
10.1 |
3.9 |
10.8 |
3.8 |
11.8 |
3.8 |
Other Employees |
10.7 |
4.1 |
11.5 |
3.8 |
12.3 |
3.7 |
Self-Employed |
11.0 |
4.0 |
11.8 |
3.8 |
12.6 |
3.7 |
Housewives |
11.2 |
4.0 |
11.9 |
3.8 |
12.6 |
3.8 |
Retired Persons |
11.1 |
4.0 |
11.7 |
4.0 |
12.4 |
3.9 |
Daily Workers |
11.2 |
4.2 |
11.9 |
4.1 |
12.4 |
3.8 |
Other category |
10.8 |
4.0 |
11.6 |
3.9 |
12.5 |
3.5 |
Age-wise |
|
|
|
|
|
|
Up to 25 years |
11.4 |
4.2 |
12.1 |
3.9 |
13.0 |
3.6 |
25 to 30 years |
10.6 |
3.9 |
11.3 |
3.8 |
12.1 |
3.7 |
30 to 35 years |
11.0 |
4.0 |
11.7 |
3.7 |
12.7 |
3.7 |
35 to 40 years |
10.6 |
4.1 |
11.4 |
3.8 |
12.4 |
3.6 |
40 to 45 years |
10.9 |
4.0 |
11.6 |
3.8 |
12.3 |
3.9 |
45 to 50 years |
11.1 |
4.0 |
11.7 |
3.8 |
12.5 |
3.6 |
50 to 55 years |
11.0 |
4.2 |
11.7 |
4.1 |
12.2 |
3.9 |
55 to 60 years |
11.0 |
4.0 |
11.6 |
3.8 |
12.4 |
3.6 |
60 years and above |
11.6 |
4.2 |
12.0 |
4.2 |
12.7 |
4.1 |
City-wise |
|
|
|
|
|
|
Mumbai |
14.8 |
2.4 |
14.5 |
3.5 |
15.8 |
2.3 |
Delhi |
9.8 |
3.1 |
10.3 |
3.8 |
11.7 |
3.3 |
Chennai |
9.6 |
2.0 |
10.5 |
2.1 |
10.1 |
3.3 |
Kolkata |
8.0 |
2.9 |
8.5 |
3.1 |
8.9 |
3.2 |
Bangalore |
15.6 |
1.8 |
15.8 |
1.5 |
16.0 |
1.1 |
Hyderabad |
10.7 |
2.3 |
11.6 |
2.4 |
12.6 |
2.4 |
Ahmedabad |
9.8 |
3.2 |
11.0 |
2.5 |
12.2 |
2.3 |
Lucknow |
12.4 |
4.1 |
13.2 |
3.7 |
14.1 |
3.3 |
Jaipur |
14.7 |
4.2 |
15.4 |
2.8 |
15.7 |
2.8 |
Bhopal |
5.9 |
2.8 |
7.1 |
1.6 |
8.7 |
1.5 |
Patna |
13.7 |
3.4 |
14.4 |
3.0 |
15.1 |
2.4 |
Guwahati |
8.3 |
1.1 |
9.9 |
1.7 |
11.5 |
2.7 |
All |
11.0 |
4.1 |
11.7 |
3.9 |
12.5 |
3.8 |
III.6 Cross-tabulation of Current inflation and
Future Expectations
-
The proportion of respondents perceiving and
expecting inflation to be at double digit have
decreased as compared with those in the last
round.
-
In particular, 51.7 per cent (72.0 per cent in
previous round) of respondents perceive double
digit current inflation. Similarly, 63.0 per cent (78.9 per cent in previous round) and 70.0 per cent
(85.3 per cent in previous round) of the respondents
with some idea about future inflation expect
double digit inflation rates for three-month ahead
and one-year ahead periods (Table 10, Table 11 and Chart 3).
-
A cross-tabulation of the current inflation
perception with the future inflation expectations
indicates that among the 51.7 per cent respondents who perceive the current inflation in double digit,
around 97 per cent expect that it would remain at similar levels in next three months or in next one
year (Table 10 and Table 11).
Table 10: Cross-tabulation of Current and Three-month Ahead Inflation Expectations |
(Number of respondents) |
Three-month ahead inflation rate (per cent) |
Current inflation rate (per cent) |
|
<1 |
1-2 |
2-3 |
3-4 |
4-5 |
5-6 |
6-7 |
7-8 |
8-9 |
9-10 |
10-11 |
11-12 |
12-13 |
13-14 |
14-15 |
15-16 |
>=16 |
No idea |
Total |
<1 |
3 |
|
|
|
1 |
|
1 |
|
|
|
3 |
1 |
|
|
|
|
6 |
|
15 |
1-2 |
|
|
|
|
2 |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
3 |
2-3 |
|
|
|
4 |
9 |
13 |
3 |
1 |
|
|
|
|
|
|
1 |
|
|
|
31 |
3-4 |
|
|
|
|
4 |
15 |
10 |
1 |
|
|
|
|
|
|
|
|
1 |
|
31 |
4-5 |
|
2 |
|
|
4 |
10 |
61 |
10 |
|
1 |
|
1 |
|
|
|
2 |
1 |
|
92 |
5-6 |
1 |
|
|
1 |
6 |
68 |
26 |
34 |
8 |
5 |
2 |
|
2 |
|
|
|
|
|
153 |
6-7 |
4 |
|
|
1 |
|
23 |
117 |
148 |
36 |
17 |
5 |
2 |
|
1 |
1 |
|
1 |
2 |
358 |
7-8 |
6 |
|
|
|
|
2 |
17 |
126 |
221 |
93 |
54 |
7 |
6 |
|
|
|
2 |
9 |
543 |
8-9 |
2 |
|
|
|
|
|
2 |
11 |
55 |
152 |
56 |
40 |
3 |
1 |
|
|
1 |
16 |
339 |
9-10 |
6 |
|
|
|
|
|
|
3 |
6 |
60 |
242 |
28 |
13 |
2 |
5 |
|
2 |
1 |
368 |
10-11 |
4 |
|
|
|
|
3 |
|
1 |
4 |
7 |
38 |
211 |
19 |
2 |
1 |
2 |
6 |
1 |
299 |
11-12 |
|
|
|
|
|
|
|
|
|
5 |
7 |
13 |
146 |
18 |
4 |
3 |
8 |
|
204 |
12-13 |
1 |
|
|
|
|
|
|
|
|
1 |
2 |
2 |
5 |
123 |
16 |
2 |
4 |
|
156 |
13-14 |
3 |
|
|
|
|
|
|
|
1 |
|
|
2 |
1 |
15 |
124 |
43 |
2 |
|
191 |
14-15 |
1 |
|
|
|
|
|
1 |
|
|
|
1 |
2 |
1 |
2 |
20 |
104 |
22 |
|
154 |
15-16 |
1 |
|
|
|
|
|
|
1 |
|
|
1 |
|
|
1 |
3 |
16 |
74 |
1 |
98 |
>=16 |
16 |
|
|
|
|
1 |
|
2 |
|
2 |
18 |
3 |
5 |
7 |
12 |
21 |
871 |
7 |
965 |
Total |
48 |
2 |
0 |
6 |
26 |
136 |
238 |
338 |
331 |
343 |
429 |
312 |
201 |
172 |
187 |
193 |
1,001 |
37 |
4,000 |
Note: The shaded cells represent the number of respondents who perceived current inflation in double digit and also expected double digit inflation
in the next three-month ahead. |
Table 11: Cross-tabulation of Current and One-year Ahead Inflation Expectations |
(Number of respondents) |
One-year ahead inflation rate (per cent) |
Current inflation rate (per cent) |
|
<1 |
1-2 |
2-3 |
3-4 |
4-5 |
5-6 |
6-7 |
7-8 |
8-9 |
9-10 |
10-11 |
11-12 |
12-13 |
13-14 |
14-15 |
15-16 |
>=16 |
No idea |
Total |
<1 |
3 |
|
|
|
|
|
|
|
|
|
1 |
|
|
|
|
1 |
10 |
|
15 |
1-2 |
|
|
|
|
|
|
1 |
1 |
|
|
1 |
|
|
|
|
|
|
|
3 |
2-3 |
|
|
|
|
|
5 |
4 |
10 |
4 |
2 |
3 |
|
1 |
|
|
|
1 |
1 |
31 |
3-4 |
|
|
|
1 |
|
2 |
1 |
12 |
2 |
4 |
4 |
2 |
|
|
2 |
|
1 |
|
31 |
4-5 |
|
|
|
1 |
1 |
3 |
6 |
39 |
23 |
5 |
5 |
1 |
2 |
2 |
1 |
1 |
2 |
|
92 |
5-6 |
|
|
|
1 |
5 |
36 |
9 |
20 |
42 |
21 |
12 |
3 |
1 |
|
1 |
|
2 |
|
153 |
6-7 |
6 |
|
|
|
2 |
28 |
65 |
54 |
123 |
41 |
13 |
6 |
8 |
3 |
2 |
|
3 |
4 |
358 |
7-8 |
8 |
|
|
|
|
4 |
26 |
87 |
101 |
140 |
47 |
67 |
29 |
7 |
5 |
7 |
4 |
11 |
543 |
8-9 |
3 |
|
|
|
|
|
1 |
21 |
72 |
26 |
85 |
21 |
40 |
12 |
25 |
12 |
3 |
18 |
339 |
9-10 |
7 |
|
|
|
|
|
|
3 |
14 |
37 |
35 |
138 |
81 |
25 |
7 |
7 |
10 |
4 |
368 |
10-11 |
5 |
|
|
|
|
|
|
1 |
1 |
14 |
41 |
33 |
139 |
31 |
17 |
1 |
13 |
3 |
299 |
11-12 |
5 |
|
|
|
|
|
|
|
|
3 |
4 |
21 |
12 |
103 |
22 |
13 |
21 |
|
204 |
12-13 |
1 |
|
|
|
|
|
|
|
1 |
|
|
3 |
16 |
5 |
95 |
19 |
15 |
1 |
156 |
13-14 |
1 |
|
|
|
|
|
|
|
|
|
|
1 |
|
15 |
5 |
91 |
78 |
|
191 |
14-15 |
|
|
|
|
|
|
|
|
|
|
|
1 |
|
1 |
7 |
21 |
122 |
2 |
154 |
15-16 |
2 |
|
|
|
|
|
1 |
|
1 |
|
1 |
|
|
|
1 |
4 |
85 |
3 |
98 |
>=16 |
8 |
1 |
|
1 |
|
1 |
1 |
|
1 |
1 |
5 |
1 |
2 |
3 |
2 |
8 |
921 |
9 |
965 |
Total |
49 |
1 |
0 |
4 |
8 |
79 |
115 |
248 |
385 |
294 |
257 |
298 |
331 |
207 |
192 |
185 |
1291 |
56 |
4000 |
Note: The shaded cells represent the number of respondents who perceived current inflation in double digit and also expected double digit inflation
in the next one-year ahead. |
 |
III.7 Awareness on Reserve Bank of India’s
Action to Control Inflation
-
On the feedback of the Reserve Bank’s action
to control inflation and its impact, the survey
finds that 60.6 per cent (68.2 per cent in previous
round) of respondents are aware that the
Reserve Bank takes action to control inflation.
Among these, 27.3 per cent (36.0 per cent in
previous round) felt that the Reserve Bank is
taking necessary action (Chart 4), of which, 49.9
per cent think that the action has an impact on
controlling inflation.
-
While financial sector employees are mostly
aware of the Reserve Bank role in controlling
inflation, daily workers are largely unaware
(Chart 5).
-
Among the respondents in each category who felt
that the Reserve Bank is taking necessary action
to control inflation, majority of the financial sector
employees, other employees and other category
of respondents felt that the Reserve Bank’s action
has an impact on inflation control (Table 12).
 |
| |
 |
Table 12: Category-wise Responses on the Impact
of RBI’s Action on Inflation Control |
Category of Respondents |
Impact of RBI’s action on
inflation control
(percent of respondents*) |
Yes |
No |
No Idea |
Financial Sector Employees |
50.5 |
39.8 |
9.7 |
Other Employees |
55.8 |
32.0 |
12.2 |
Self-employed |
46.6 |
46.2 |
7.3 |
Housewives |
45.1 |
36.3 |
18.6 |
Retired Persons |
48.8 |
42.4 |
8.8 |
Daily Workers |
57.7 |
26.9 |
15.4 |
Other Category |
52.5 |
33.8 |
13.8 |
* Respondents who felt that RBI is taking necessary action to control
inflation |
III.8 Expectations in Change of Income/Wages
-
Out of 2,167 respondents in the wage earners/
self-employed/daily workers categories, 52.7 per cent reported increase in wages/income in the past
one year. Around 70 per cent do not expect any
change in their income/wage in next three
months. However, 72.5 per cent feel their income/
wages will increase in next one-y ear (Table 13).
-
Among the respondents who have reported wages/
income increase in past one year, the highest (70.2
per cent) are from financial sector employee and
the least (42.5 per cent) are from daily workers.
-
83.0 per cent of financial sector employees, 76.8
per cent of other employees, 67.9 per cent of selfemployed
and 65.4 per cent of daily workers
expect increase in income in next one year.
Table 13: Respondent’s Expectation on Change in Wage/Income level |
(Percentage of Response) |
Category of Respondents |
Change in income since
last year |
Change in income in
three-month
ahead period |
Change in income in
one-year
ahead period |
Increase |
Same |
Decrease |
Increase |
Same |
Decrease |
Increase |
Same |
Decrease |
Financial Sector Employees |
70.2 |
28.7 |
1.1 |
35.5 |
64.2 |
0.3 |
83.0 |
16.8 |
0.3 |
Other Employees |
54.9 |
41.7 |
3.4 |
28.7 |
68.9 |
2.4 |
76.8 |
21.3 |
1.9 |
Total Employees |
60.4 |
37.0 |
2.6 |
31.1 |
67.2 |
1.6 |
79.0 |
19.7 |
1.3 |
Self- Employed |
48.0 |
41.3 |
10.7 |
22.7 |
70.3 |
7.0 |
67.9 |
26.5 |
5.6 |
Daily Workers |
42.5 |
51.0 |
6.6 |
21.7 |
75.5 |
2.8 |
65.4 |
32.0 |
2.6 |
Total |
52.7 |
40.9 |
6.4 |
26.3 |
69.8 |
3.9 |
72.5 |
24.3 |
3.2 |
|