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November 16, 2019

Indian consumer demand slumps


November 16, 2019

Mumbai: Consumer spending in India has slumped for the first time in four decades, a leading business daily reported on Friday, bringing more bad news for Prime Minister Narendra Modi as he struggles to revive a stuttering economy.

Consumer demand in India´s villages fell 8.8 percent between July 2017 and June 2018, compared with 2011-12, the Business Standard reported, using unpublished National Statistical Office (NSO) data.

Two-thirds of India´s 1.3 billion population lives in rural areas, making it a key economic driver. But spending on food, education and clothing declined, with demand for essential items such as cereals plunging 20 percent, the newspaper said.

Although urban consumption rose by two percent, overall per capita monthly spending in the country slipped 3.7 percent -- the first time it has fallen since 1972-73, the business daily said.

The report should have been released in June, but was pushed back because of its "adverse" findings, the Business Standard said, citing sources familiar with the matter.

A government official told AFP the report was not finished.

"The NSO report is still under processing and not validated, and many officials are not privy to the data," said A.K. Mishra of the ministry of statistics.

The data "can only be confirmed once the ministry publishes the report", Mishra added.

If the findings are confirmed, it would ring yet another alarm bell over Asia´s third-largest economy, which has endured five consecutive quarters of slowing growth.

In January, the Business Standard reported that unemployment had surged to a four-decade high during Modi´s first term in power, citing unpublished government data.

The delay in releasing the jobs report prompted a top Indian government statistician to quit in protest.

The report confirming the jobless data was finally released in May, after Modi was re-elected with a thumping majority, defeating challenger Rahul Gandhi.

On Friday, Gandhi hit out at the government´s alleged attempt to bury unflattering data, tweeting: "Modinomics stinks so bad, the Govt has to hide its own reports."

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