The findings of Inflation Expectations Survey of
Households conducted in the July-September 2011
quarter, the 25th round in the series is 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
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 not necessarily shared by
the Reserve Bank of India.
The current round of the survey shows that the
percentage of respondents expecting price rise have gone
down for all product groups (viz., food, non-food, household
durables, housing and services) except three-month ahead
price of housing. Expectations on general price rise were
mainly influenced by movements in food prices. The threemonth
ahead inflation expectations of households have
moved higher at 12.2 per cent from 11.8 per cent in the
last round of survey but one-year ahead inflation
expectations has remained same at 12.9 per cent. The
survey findings indicate that households expect inflation
to rise further by 50 and 120 basis points during the next
three-month and next one-year, respectively, from the
perceived current rate of 11.7 per cent. On category-wise
inflation expectations, daily-wage workers and housewives
expected higher inflation rates compared to other categories.
Across the cities, Jaipur expected the highest inflation while
expectations were the lowest for Kolkata. 27 per cent of the
respondents felt that the Reserve Bank is taking necessary
action to control inflation, of which, 58 per cent felt that
the Reserve Bank’s action has an impact on controlling
inflation.
I. Introduction
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 short
and long-term indicated by three and twelve-month
period ahead 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 are
well-spread across the cities to provide a good
geographical coverage. The male and female
respondents in the group are usually 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 single page survey schedule (Annex) is
organised into seven blocks covering the respondent
profile (Block 1), general and product-wise short and
long-term price expectations (Block 2 and 3), feedback on the Reserve Bank’s action to control inflation (Block
4), current and expected short and long-term inflation
rate (Block 5), amount paid for the purchase of major
food items during last one month (Block 6). From the
current round, a new block (Block 7) has been added
to seek respondents’ expectations on changes in their
income/wages.
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 |
9.9 |
10.0 |
Other Employees |
15.8 |
15.0 |
Self-Employed |
21.3 |
20.0 |
Housewives |
28.8 |
30.0 |
Retired Persons |
8.9 |
10.0 |
Daily Workers |
9.6 |
10.0 |
Other Categories |
5.8 |
5.0 |
Total |
100 |
100 |
Note: The above Sample proportion is for the quarter ended September 2011 survey |
III. Survey Results
III.1General Price Expectations
• The percentage of respondents expecting increase
in general prices for both three-month ahead and
one-year ahead have gone down to 96-97 per cent
from around 99 per cent in the previous round
(April-June 2011) (Table 2.1).
• For both three-month and one-year ahead
periods, the proportion of respondents
who expect price increase to be ‘higher than
current rate’ has increasedvis-à-vis last round
(Table 2.1).
III.2 Product Group-wise Price Expectations
• The percentage of respondents expecting price
increase has gone down for food products (Table
2.2), non-food products (Table 2.3), household
durables (Table 2.4) and services (Table 2.6) but
has gone up for three-month ahead expectations
for housing prices (Table 2.5).
• Proportion of households expecting price increase
in next three-month by ‘more than the current
rate’ has gone up marginally in case of food
products, non-food products and household
durables but significantly for housing and cost of
services (Table 2).
• However, vis-à-vis last round, more households
expect cost of services to increase faster than the
current rate in next one-year (Table 2.6).
Table 2: Percentage of Respondents – Product-wise Expectations of Prices for Three-month and One-year Ahead
Table 2.1: General |
Round No./survey period
(quarter ended) → |
16
Jun-09 |
17
Sep-09 |
18
Dec-09 |
19
Mar-10 |
20
Jun-10 |
21
Sep-10 |
22
Dec-10 |
23
Mar-11 |
24
Jun-11 |
25
Sep-11 |
Options |
Three-month ahead (percentage of respondents) |
Prices will increase |
93.1 |
95.8 |
97.4 |
95.7 |
95.3 |
96.5 |
98.6 |
96.0 |
98.7 |
97.3 |
Price increase more than current rate |
63.5 |
72.2 |
74.6 |
66.9 |
72.7 |
72.2 |
74.3 |
72.9 |
71.8 |
75.8 |
Price increase similar to current rate |
20.7 |
18.4 |
16.6 |
20.0 |
20.0 |
21.0 |
22.0 |
20.4 |
19.8 |
15.4 |
Price increase less than current rate |
8.9 |
5.1 |
6.2 |
8.8 |
2.6 |
3.3 |
2.3 |
2.7 |
7.1 |
6.0 |
No change in prices |
6.1 |
3.7 |
2.4 |
3.4 |
4.2 |
2.9 |
1.1 |
3.5 |
1.2 |
2.2 |
Decline in price |
0.9 |
0.6 |
0.3 |
0.9 |
0.5 |
0.6 |
0.4 |
0.5 |
0.1 |
0.6 |
Options |
One-year ahead (percentage of respondents) |
Prices will increase |
93.7 |
96.3 |
96.3 |
96.5 |
95.2 |
95.6 |
98.9 |
96.1 |
98.7 |
96.0 |
Price increase more than current rate |
62.8 |
69.5 |
68.2 |
62.8 |
70.8 |
70.4 |
77.4 |
73.4 |
73.3 |
73.5 |
Price increase similar to current rate |
18.5 |
17.3 |
15.2 |
19.8 |
18.7 |
19.7 |
17.9 |
18.6 |
18.0 |
16.7 |
Price increase less than current rate |
12.4 |
9.5 |
12.9 |
13.9 |
5.7 |
5.6 |
3.6 |
4.2 |
7.4 |
5.9 |
No change in prices |
5.3 |
3.1 |
3.1 |
2.6 |
3.8 |
3.5 |
0.9 |
3.5 |
1.3 |
3.3 |
Decline in price |
0.9 |
0.7 |
0.6 |
0.9 |
1.1 |
0.9 |
0.3 |
0.3 |
0.0 |
0.7 |
Table 2.2: Food Products |
Round No./survey period
(quarter ended) → |
16
Jun-09 |
17
Sep-09 |
18
Dec-09 |
19
Mar-10 |
20
Jun-10 |
21
Sep-10 |
22
Dec-10 |
23
Mar-11 |
24
Jun-11 |
25
Sep-11 |
Options |
Three-month ahead (percentage of respondents) |
Prices will increase |
94.6 |
96.3 |
98.0 |
95.9 |
95.8 |
96.7 |
98.1 |
95.4 |
98.6 |
97.3 |
Price increase more than current rate |
64.5 |
76.1 |
81.1 |
70.4 |
74.9 |
74.7 |
73.1 |
69.4 |
72.0 |
74.2 |
Price increase similar to current rate |
21.5 |
15.0 |
11.7 |
15.5 |
17.7 |
18.0 |
21.3 |
21.0 |
17.5 |
17.2 |
Price increase less than current rate |
8.6 |
5.2 |
5.3 |
10.0 |
3.2 |
4.0 |
3.7 |
5.1 |
9.1 |
5.9 |
No change in prices |
4.6 |
3.0 |
1.4 |
3.1 |
3.5 |
2.3 |
1.4 |
3.8 |
1.2 |
1.9 |
Decline in price |
0.9 |
0.8 |
0.6 |
1.0 |
0.7 |
1.0 |
0.6 |
0.8 |
0.2 |
0.9 |
Options |
One-year ahead (percentage of respondents) |
Prices will increase |
94.7 |
96.2 |
96.5 |
96.8 |
95.6 |
95.7 |
98.6 |
95.9 |
98.6 |
95.8 |
Price increase more than current rate |
63.6 |
71.0 |
72.1 |
65.9 |
72.8 |
71.7 |
76.4 |
75.5 |
73.6 |
72.0 |
Price increase similar to current rate |
18.9 |
15.2 |
11.9 |
16.5 |
16.9 |
17.8 |
17.8 |
16.6 |
17.2 |
19.0 |
Price increase less than current rate |
12.2 |
10.0 |
12.5 |
14.5 |
5.9 |
6.2 |
4.4 |
3.9 |
7.9 |
4.8 |
No change in prices |
4.5 |
2.9 |
2.7 |
2.3 |
3.3 |
3.2 |
1.1 |
3.6 |
1.3 |
3.3 |
Decline in price |
0.8 |
0.9 |
0.9 |
0.9 |
1.1 |
1.1 |
0.4 |
0.5 |
0.1 |
0.9 |
Table 2.3: Non-Food Products |
Round No./survey period (quarter ended) → |
16
Jun-09 |
17
Sep-09 |
18
Dec-09 |
19
Mar-10 |
20
Jun-10 |
21
Sep-10 |
22
Dec-10 |
23
Mar-11 |
24
Jun-11 |
25
Sep-11 |
Three-month ahead (percentage of respondents) |
| Options |
Prices will increase |
91.4 |
94.7 |
95.8 |
94.0 |
92.9 |
95.4 |
95.9 |
95.0 |
98.0 |
95.6 |
Price increase more than current rate |
51.2 |
59.3 |
63.1 |
57.4 |
60.1 |
64.4 |
58.8 |
58.4 |
65.6 |
67.1 |
Price increase similar to current rate |
28.4 |
27.1 |
24.8 |
28.0 |
29.4 |
27.3 |
33.2 |
31.3 |
25.0 |
21.5 |
Price increase less than current rate |
11.8 |
8.3 |
7.9 |
8.7 |
3.4 |
3.7 |
3.9 |
5.3 |
7.4 |
7.0 |
No change in prices |
7.7 |
4.7 |
3.7 |
4.8 |
6.3 |
3.9 |
0.5 |
4.4 |
1.9 |
3.8 |
Decline in price |
1.0 |
0.7 |
0.5 |
1.2 |
0.9 |
0.7 |
0.7 |
0.6 |
0.1 |
0.7 |
Options |
One-year ahead (percentage of respondents) |
Prices will increase |
91.9 |
95.2 |
94.6 |
94.7 |
92.8 |
94.6 |
97.5 |
94.7 |
97.8 |
95.2 |
Price increase more than current rate |
53.1 |
59.6 |
60.7 |
53.0 |
59.7 |
64.0 |
65.2 |
59.9 |
66.9 |
66.4 |
Price increase similar to current rate |
25.0 |
23.6 |
20.7 |
27.6 |
26.4 |
24.9 |
28.1 |
29.2 |
24.0 |
22.7 |
Price increase less than current rate |
13.8 |
12.1 |
13.2 |
14.1 |
6.7 |
5.7 |
4.2 |
5.6 |
7.0 |
6.1 |
No change in prices |
7.3 |
4.0 |
4.6 |
4.2 |
5.9 |
4.4 |
2.2 |
4.6 |
2.0 |
4.1 |
Decline in price |
0.8 |
0.8 |
0.8 |
1.1 |
1.3 |
1.0 |
0.4 |
0.7 |
0.1 |
0.8 |
Table 2.4: Household Durables |
Round No./survey period
(quarter ended) → |
16
Jun-09 |
17
Sep-09 |
18
Dec-09 |
19
Mar-10 |
20
Jun-10 |
21
Sep-10 |
22
Dec-10 |
23
Mar-11 |
24
Jun-11 |
25
Sep-11 |
Options |
Three-month ahead (percentage of respondents) |
Prices will increase |
80.0 |
86.8 |
87.7 |
86.4 |
87.1 |
89.7 |
91.9 |
90.4 |
91.7 |
91.0 |
Price increase more than current rate |
37.2 |
38.4 |
45.5 |
44.1 |
45.1 |
45.8 |
45.5 |
47.0 |
49.0 |
50.5 |
Price increase similar to current rate |
26.3 |
30.5 |
23.4 |
27.2 |
30.5 |
32.9 |
28.9 |
28.0 |
30.6 |
26.4 |
Price increase less than current rate |
16.5 |
18.0 |
18.9 |
15.1 |
11.6 |
11.0 |
17.5 |
15.4 |
12.1 |
14.1 |
No change in prices |
15.7 |
11.0 |
9.5 |
8.8 |
9.1 |
6.3 |
5.9 |
5.9 |
6.7 |
5.8 |
Decline in price |
4.4 |
2.2 |
2.9 |
4.8 |
3.8 |
4.1 |
2.4 |
3.8 |
1.7 |
3.3 |
Options |
One-year ahead (percentage of respondents) |
Prices will increase |
80.4 |
88.7 |
87.8 |
85.2 |
87.2 |
89.0 |
94.4 |
91.3 |
92.8 |
91.5 |
Price increase more than current rate |
38.4 |
43.3 |
45.5 |
43.2 |
46.6 |
46.3 |
48.6 |
49.6 |
52.0 |
52.2 |
Price increase similar to current rate |
24.3 |
28.2 |
22.1 |
25.4 |
30.1 |
31.8 |
32.5 |
29.0 |
25.7 |
26.0 |
Price increase less than current rate |
17.7 |
17.3 |
20.3 |
16.6 |
10.6 |
11.0 |
13.3 |
12.8 |
15.1 |
13.3 |
No change in prices |
16.2 |
9.1 |
8.5 |
9.6 |
8.0 |
6.7 |
3.8 |
5.7 |
5.4 |
6.2 |
Decline in price |
3.5 |
2.2 |
3.7 |
5.3 |
4.8 |
4.3 |
1.9 |
3.0 |
1.9 |
2.3 |
Table 2.5: Housing Prices |
Round No./survey period
(quarter ended) → |
16
Jun-09 |
17
Sep-09 |
18
Dec-09 |
19
Mar-10 |
20
Jun-10 |
21
Sep-10 |
22
Dec-10 |
23
Mar-11 |
24
Jun-11 |
25
Sep-11 |
Options |
Three-month ahead (percentage of respondents) |
Prices will increase |
92.4 |
93.8 |
96.1 |
95.2 |
96.1 |
96.0 |
97.0 |
94.5 |
95.2 |
97.0 |
Price increase more than current rate |
55.9 |
64.4 |
70.8 |
60.4 |
70.8 |
64.6 |
73.1 |
73.5 |
65.4 |
73.5 |
Price increase similar to current rate |
25.4 |
22.0 |
19.8 |
25.4 |
21.0 |
24.8 |
21.3 |
18.3 |
23.5 |
18.2 |
Price increase less than current rate |
11.1 |
7.4 |
5.6 |
9.5 |
4.3 |
6.7 |
2.6 |
2.7 |
6.4 |
5.4 |
No change in prices |
6.4 |
5.0 |
3.4 |
3.5 |
3.1 |
2.8 |
2.1 |
4.7 |
4.5 |
2.2 |
Decline in price |
1.3 |
1.2 |
0.5 |
1.3 |
0.9 |
1.2 |
0.9 |
0.8 |
0.3 |
0.8 |
Options |
One-year ahead (percentage of respondents) |
Prices will increase |
93.0 |
94.9 |
96.4 |
94.1 |
96.1 |
95.3 |
97.9 |
94.8 |
97.6 |
95.8 |
Price increase more than current rate |
57.6 |
66.0 |
73.4 |
61.0 |
72.0 |
65.9 |
75.5 |
72.1 |
70.4 |
70.2 |
Price increase similar to current rate |
22.1 |
21.4 |
15.1 |
21.7 |
19.1 |
21.6 |
19.4 |
20.1 |
21.7 |
20.0 |
Price increase less than current rate |
13.3 |
7.6 |
7.9 |
11.4 |
5.0 |
7.9 |
3.0 |
2.7 |
5.6 |
5.6 |
No change in prices |
5.8 |
3.8 |
2.9 |
4.6 |
2.7 |
3.2 |
1.4 |
4.6 |
2.0 |
3.3 |
Decline in price |
1.2 |
1.3 |
0.7 |
1.3 |
1.2 |
1.5 |
0.8 |
0.6 |
0.4 |
0.9 |
Table 2.6: Cost of Services |
Round No./survey period
(quarter ended) → |
16
Jun-09 |
17
Sep-09 |
18
Dec-09 |
19
Mar-10 |
20
Jun-10 |
21
Sep-10 |
22
Dec-10 |
23
Mar-11 |
24
Jun-11 |
25
Sep-11 |
Options |
Three-month ahead (percentage of respondents) |
Prices will increase |
87.3 |
92.4 |
91.7 |
89.9 |
94.1 |
94.2 |
94.1 |
91.6 |
96.2 |
95.3 |
Price increase more than current rate |
53.1 |
63.7 |
62.7 |
58.6 |
63.2 |
59.2 |
61.4 |
62.1 |
61.0 |
68.1 |
Price increase similar to current rate |
22.2 |
22.9 |
21.2 |
23.9 |
26.2 |
28.6 |
28.9 |
26.4 |
26.2 |
20.3 |
Price increase less than current rate |
12.0 |
5.8 |
7.8 |
7.5 |
4.8 |
6.4 |
3.8 |
3.1 |
9.1 |
6.8 |
No change in prices |
11.3 |
6.3 |
7.0 |
6.7 |
4.8 |
5.2 |
4.5 |
7.7 |
3.8 |
4.0 |
Decline in price |
1.5 |
1.3 |
1.4 |
3.4 |
1.1 |
0.6 |
1.4 |
0.7 |
0.0 |
0.8 |
Options |
One-year ahead (percentage of respondents) |
Prices will increase |
88.1 |
95.0 |
92.3 |
89.9 |
94.2 |
94.3 |
95.2 |
91.2 |
97.3 |
95.2 |
Price increase more than current rate |
54.4 |
65.6 |
62.9 |
57.2 |
63.2 |
58.0 |
64.6 |
62.6 |
62.7 |
66.3 |
Price increase similar to current rate |
20.2 |
21.5 |
18.5 |
23.0 |
24.9 |
29.5 |
25.7 |
24.4 |
25.3 |
23.4 |
Price increase less than current rate |
13.5 |
7.9 |
10.9 |
9.8 |
6.1 |
6.8 |
4.9 |
4.2 |
9.3 |
5.4 |
No change in prices |
10.3 |
4.1 |
6.0 |
6.9 |
4.6 |
4.9 |
4.1 |
8.2 |
2.6 |
4.2 |
Decline in price |
1.6 |
1.0 |
1.8 |
3.2 |
1.2 |
0.9 |
0.7 |
0.7 |
0.1 |
0.7 |
III.3 Coherence between General and Product
Group-wise Price Expectations
• As in the past rounds, the general price
expectations are observed to be more aligned with
food price expectations as compared with other
product groups. Around 90 per cent of the
respondents appeared to have been driven by
expected changes in food prices for arriving at
general price expectations (Table 3 and Table 4).
• The extent of coherence between general price
expectations and that of other product groups has by and large increased in the current survey round
as compared with the previous round.The
association was the lowest 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 |
Food |
Non-
Food |
House-
hold
Durables |
Housing |
Cost
of
Services |
16 |
Jun-09 |
87.0 |
79.3 |
59.4 |
72.0 |
76.7 |
17 |
Sep-09 |
89.1 |
81.3 |
56.5 |
78.1 |
82.2 |
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 |
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 |
Food |
Non-
Food |
House-
hold
Durables |
Housing |
Cost
of
Services |
16 |
Jun-09 |
89.2 |
82.2 |
61.4 |
76.8 |
78.5 |
17 |
Sep-09 |
91.9 |
85.8 |
65.0 |
78.9 |
82.3 |
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 |
78.8 |
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 |
III.4 Inflation Expectations
• The three-month ahead inflation expectations
based on average of inflation rate reported by
4,000 households have tended upwards at 12.2
per cent from 11.8 per cent in the last round but
one-year ahead inflation expectations have stayed
at 12.9 per cent (Table 5 and Chart 1).
• The respondents’ views on the current perceived
and the three-month ahead expected inflation
have increased by 50 and 40 basis points,
respectively, vis-à-vis corresponding average rates
reported in the previous round (Table 5).
• Households expect inflation to rise further by 50
and 120 basis points during next three-month and
next one-year, respectively, from the perceived
current rate of 11.7 per cent. The expected rise
from the current inflation for the periods ahead
has, however, moderated vis-à-vis last round
(Table 5).
• For a large part of the survey history, the
households’ inflation expectations remained
between the WPI and CPI-IW inflation rates.
However, from September 2010 round of
the survey, household inflation expectations
are higher than the official inflation rates
(Chart 2).
• Based on 10,000 re-samples using simple random
sampling with replacement, 99 per cent bootstrap
confidence intervals worked out for mean for
short-term and long-term period have small width
indicating the precision of point estimates for the
population means of households’ expectations of
inflation (Table 6).
Table 5: Household Inflation Expectations –
Current, Three-month Ahead and One-year Ahead |
Survey
Round |
Survey
Quarter |
Three
month
Expectation
period |
Inflation rate in Per cent |
Current |
Three-month
Ahead |
One-year
Ahead |
13 |
Oct-08 |
Oct-Dec 08 |
11.3 |
11.6 |
12.4 |
14 |
Dec-08 |
Jan-Mar 09 |
9.3 |
8.9 |
9.6 |
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 |
III.5 Variations in Responses
• Over different rounds of the survey, the variations
in the responses in terms of standard
deviation has been observed to be lower for
current inflation rate as compared to three-month
ahead and one-year ahead expected inflation rates
(Table 7).
• 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’
(Table 8).
• Survey shows that housewives and daily workers
tend to have higher inflation expectations. No visible pattern emerged from age-wise profile of
respondents (Table 9).
• City-wise, inflation expectations were found the
highest in Jaipur followed by Bangalore and the
lowest in Kolkata (Table 9).
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 |
(11.56, 11.82) |
0.26 |
(12.07,12.35) |
0.28 |
(12.73,13.04) |
0.31 |
III.6 Cross-tabulation of Current Inflation and
Future Expectations
• The proportions of respondents perceiving and
expecting inflation at double digit for short and
long-term periods have increased as compared with those in the last round.
Table 7: Variability in Responses in Various Rounds |
Round
No. |
Survey Quarter |
Inflation Rate |
Current
|
Three-month
Ahead |
One-year
Ahead |
Mean |
Std.
Dev. |
Mean |
Std.
Dev. |
Mean |
Std.
Dev. |
15 |
Mar-09 |
5.2 |
1.9 |
5.3 |
2.6 |
6.2 |
2.7 |
16 |
Jun-09 |
5.8 |
4.4 |
6.3 |
4.6 |
6.7 |
4.7 |
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 |
Table 8: Factors that Explain the Total Variability |
Round No. |
Survey Quarter ended |
Current |
Three-month Ahead |
One-year Ahead |
15 |
Mar-09 |
City, Category |
City, Gender, Category |
City, Category |
16 |
Jun-09 |
City, Gender, Category, Age |
City, Gender, Category |
City, Category, Age |
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 |
Note: Results based on exercise using Analysis of Variance. |
• In particular, 64.5 per cent (52.8 per cent in
previous round) of respondents perceived double
digit current inflation. Similarly, 77.5 per cent
(71.5 per cent in previous round) and 83.9
per cent (81.4 per cent in previous round)
of the respondents expected double-digit inflation rates for the three-month ahead and oneyear
ahead periods (Table 10, Table 11 and
Chart 3).
Table 9: Various Group-wise Inflation Expectations for September 2011 Survey Round |
|
Current |
Three-month Ahead |
One-year Ahead |
|
Mean |
Std. Dev. |
Mean |
Std. Dev. |
Mean |
Std. Dev. |
Gender-wise |
|
|
|
|
|
|
Male |
11.6 |
3.2 |
12.2 |
3.4 |
13.0 |
3.6 |
Female |
11.8 |
3.1 |
12.3 |
3.5 |
12.8 |
3.9 |
Category-wise |
|
|
|
|
|
|
Financial Sector Employees |
11.2 |
3.1 |
11.8 |
3.2 |
12.3 |
3.9 |
Other Employees |
11.7 |
3.2 |
12.2 |
3.4 |
13.0 |
3.5 |
Self-Employed |
11.6 |
3.1 |
12.1 |
3.5 |
12.8 |
3.7 |
Housewives |
11.9 |
3.1 |
12.4 |
3.4 |
13.0 |
3.7 |
Retired Persons |
11.8 |
3.2 |
12.2 |
3.7 |
12.8 |
4.1 |
Daily Workers |
12.2 |
3.2 |
12.7 |
3.5 |
13.4 |
3.5 |
Other category |
11.4 |
2.9 |
12.0 |
3.1 |
12.6 |
3.7 |
Age-wise |
|
|
|
|
|
|
Upto 25 years |
12.1 |
3.3 |
12.7 |
3.3 |
13.6 |
3.4 |
25 to 30 years |
11.8 |
3.1 |
12.5 |
3.2 |
13.1 |
3.3 |
30 to 35 years |
11.4 |
3.0 |
12.0 |
3.2 |
12.6 |
3.6 |
35 to 40 years |
11.5 |
3.1 |
12.0 |
3.4 |
12.9 |
3.4 |
40 to 45 years |
11.6 |
3.1 |
12.1 |
3.7 |
12.7 |
3.9 |
45 to 50 years |
11.6 |
3.2 |
12.1 |
3.4 |
12.7 |
3.9 |
50 to 55 years |
11.6 |
3.2 |
12.0 |
3.7 |
12.6 |
4.2 |
55 to 60 years |
11.5 |
3.4 |
12.3 |
3.3 |
12.9 |
3.7 |
60 years and above |
11.9 |
3.2 |
12.0 |
3.9 |
12.6 |
4.4 |
City-wise |
|
|
|
|
|
|
Mumbai |
14.0 |
3.0 |
13.9 |
4.0 |
15.2 |
3.1 |
Delhi |
11.8 |
3.2 |
12.3 |
3.5 |
13.5 |
3.2 |
Chennai |
11.3 |
1.9 |
12.3 |
1.9 |
11.8 |
3.0 |
Kolkata |
9.2 |
1.2 |
8.2 |
3.3 |
7.4 |
4.3 |
Bangalore |
15.4 |
2.4 |
15.6 |
2.2 |
15.8 |
1.9 |
Hyderabad |
11.2 |
0.7 |
11.9 |
1.5 |
12.7 |
1.6 |
Ahmedabad |
12.2 |
3.2 |
13.8 |
2.7 |
15.3 |
1.6 |
Lucknow |
10.9 |
3.4 |
12.2 |
2.9 |
13.4 |
2.7 |
Jaipur |
16.5 |
0.3 |
16.3 |
1.1 |
16.4 |
0.5 |
Bhopal |
9.2 |
1.3 |
10.5 |
1.5 |
12.4 |
2.2 |
Patna |
10.2 |
1.5 |
11.2 |
1.2 |
13.1 |
1.3 |
Guwahati |
9.1 |
0.8 |
10.0 |
0.8 |
10.8 |
1.2 |
All |
11.7 |
3.1 |
12.2 |
3.4 |
12.9 |
3.7 |
Table 10: Cross-tabulation of Current and Three-month Ahead Inflation Expectations |
Three-month ahead inflation rate (per cent) |
(No. of Respondents) |
|
|
< 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 |
Current inflation rate (per cent) |
<1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
1-2 |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2 |
2-3 |
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
3-4 |
|
|
|
|
|
2 |
|
|
|
1 |
1 |
|
|
|
|
|
|
|
4 |
4-5 |
|
|
|
|
|
1 |
2 |
|
|
3 |
1 |
|
|
|
|
|
|
|
7 |
5-6 |
1 |
|
|
|
|
1 |
2 |
2 |
2 |
12 |
2 |
|
|
|
|
|
|
|
22 |
6-7 |
|
|
|
|
|
|
4 |
27 |
5 |
11 |
4 |
|
|
|
|
|
1 |
|
52 |
7-8 |
2 |
|
|
|
|
|
8 |
20 |
61 |
34 |
19 |
1 |
1 |
|
|
|
|
2 |
148 |
8-9 |
45 |
|
|
|
|
|
1 |
69 |
140 |
215 |
112 |
13 |
1 |
1 |
|
1 |
|
16 |
614 |
9-10 |
9 |
|
|
|
|
|
|
2 |
16 |
125 |
264 |
89 |
48 |
9 |
1 |
|
1 |
8 |
572 |
10-11 |
16 |
|
|
|
|
|
|
|
|
11 |
110 |
462 |
88 |
60 |
13 |
2 |
2 |
8 |
772 |
10-11 |
16 |
|
|
|
|
|
|
|
|
11 |
110 |
462 |
88 |
60 |
13 |
2 |
2 |
8 |
772 |
11-12 |
2 |
|
|
|
|
|
|
|
|
|
4 |
68 |
255 |
23 |
10 |
4 |
2 |
5 |
373 |
12-13 |
1 |
|
|
|
|
|
|
|
|
|
|
1 |
27 |
168 |
23 |
10 |
10 |
|
240 |
13-14 |
2 |
|
|
|
|
|
|
|
|
|
|
|
1 |
9 |
78 |
19 |
12 |
|
121 |
14-15 |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
5 |
54 |
17 |
1 |
78 |
15-16 |
1 |
|
|
|
|
|
|
|
|
1 |
|
|
|
|
1 |
14 |
40 |
|
57 |
>=16 |
30 |
|
|
|
|
|
|
|
|
1 |
1 |
2 |
|
|
|
40 |
859 |
4 |
937 |
Total |
110 |
0 |
2 |
0 |
1 |
4 |
17 |
120 |
224 |
414 |
518 |
636 |
421 |
270 |
131 |
144 |
944 |
44 |
4000 |
Note: The shaded cells represent the number of respondents who perceived current inflation in double-digit and also expressed double-digit in the next
three-month ahead. |
• A cross-tabulation of the current inflation
perception with the future inflation expectations
points out that among the 64.5 per cent respondents who perceived the current
inflation in double-digit, around 96 per cent
of respondents expected that it would
remain in the same band for three-month ahead
and one-year ahead periods (Table 10 and
Table 11).
Table 11: Cross-tabulation of Current and One-year Ahead Inflation Expectations |
One-year ahead inflation rate (per cent) |
(No. of Respondents) |
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
1-2 |
|
|
|
1 |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2 |
2-3 |
|
|
|
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
1 |
3-4 |
|
|
|
|
|
|
1 |
|
|
|
|
1 |
1 |
|
|
|
1 |
|
4 |
4-5 |
|
|
|
|
|
|
|
1 |
|
|
1 |
|
3 |
|
|
1 |
1 |
|
7 |
5-6 |
|
|
|
|
|
2 |
1 |
1 |
1 |
1 |
3 |
2 |
8 |
1 |
1 |
|
1 |
|
22 |
6-7 |
|
|
|
|
|
1 |
3 |
3 |
18 |
7 |
9 |
5 |
2 |
|
|
|
4 |
|
52 |
7-8 |
6 |
|
|
|
|
|
4 |
33 |
6 |
35 |
16 |
16 |
11 |
11 |
4 |
1 |
2 |
3 |
148 |
8-9 |
86 |
|
|
|
|
|
11 |
19 |
109 |
64 |
156 |
77 |
38 |
19 |
7 |
3 |
2 |
23 |
614 |
9-10 |
23 |
|
|
|
|
|
|
7 |
8 |
107 |
35 |
122 |
100 |
67 |
45 |
31 |
18 |
9 |
572 |
10-11 |
19 |
|
|
|
|
|
|
|
3 |
16 |
113 |
26 |
234 |
146 |
93 |
53 |
54 |
15 |
772 |
11-12 |
4 |
|
|
|
|
|
|
|
|
3 |
10 |
91 |
14 |
179 |
25 |
19 |
21 |
7 |
373 |
12-13 |
4 |
|
|
|
|
|
|
|
|
1 |
1 |
14 |
53 |
9 |
91 |
26 |
39 |
2 |
240 |
13-14 |
3 |
|
|
|
|
|
|
|
|
|
|
|
8 |
31 |
4 |
42 |
33 |
|
121 |
14-15 |
6 |
|
|
|
|
|
|
|
|
|
1 |
|
1 |
3 |
9 |
1 |
56 |
1 |
78 |
15-16 |
|
|
|
|
|
|
|
|
|
|
3 |
|
|
1 |
|
10 |
43 |
|
57 |
>=16 |
13 |
|
|
|
|
|
|
|
|
1 |
1 |
|
1 |
1 |
2 |
22 |
887 |
9 |
937 |
Total |
164 |
0 |
0 |
1 |
1 |
3 |
20 |
64 |
145 |
236 |
349 |
354 |
474 |
468 |
281 |
209 |
1162 |
69 |
4000 |
Note: The shaded cells represent the number of respondents who perceived current inflation in double-digit and also expressed double-digit 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 action to
control inflation and its impact, the survey finds that 62.6 per cent of respondents are aware that
RBI takes action on inflation control. Among these,
26.7 per cent felt that RBI is taking necessary
action (Chart 4).
• Among these 26.7 per cent, 58.1 per cent think
that the action has an impact on controlling
inflation (Chart 4).
• While financial sector employees are mostly aware
of the Reserve Bank role in controlling inflation,
daily workers are largely unaware (Chart 5).
III.8 Expectations in Change of Income/Wages
• Out of 2,257 respondents in the wage-earners/selfemployed/
daily workers categories, 45 per cent
reported increase in wages/income in the past one
year. 23 per cent of the respondents from these
categories are expecting an increase in next threemonth
and 55 per cent in next one-year. Going
forward, 73 per cent (41 per cent) do not expect
any change in wages/income in next three-month
(next one-year) (Table 12).
• Among the 45 per cent respondents who have
reported wages/income increase in past one year,
55 per cent are from salaried class, 39 per cent
are self-employed and 30 per cent are daily
workers (Table 12).
• 45 per cent of daily workers, 50 per cent of selfemployed
and 63 per cent of financial sector and
other employees expect increase in income in
next one-year (Table 12).
Table 12: Respondent’s Expectation on Change in Wage/Income level |
Percentage of Response |
Category of Respondent |
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 |
61.6 |
34.6 |
3.8 |
31.5 |
66.5 |
2.0 |
62.9 |
35.0 |
2.0 |
Other Employees |
51.8 |
45.3 |
2.9 |
21.4 |
76.5 |
2.1 |
63.4 |
34.3 |
2.2 |
Total Employees |
55.6 |
41.2 |
3.2 |
25.2 |
72.7 |
2.1 |
63.2 |
34.6 |
2.2 |
Self-Employed |
39.4 |
50.7 |
9.9 |
21.0 |
73.8 |
5.2 |
49.8 |
45.1 |
5.2 |
Daily Workers |
29.8 |
58.7 |
11.5 |
18.7 |
72.4 |
8.9 |
44.7 |
46.1 |
9.2 |
Total |
45.1 |
47.8 |
7.1 |
22.5 |
73.1 |
4.4 |
55.0 |
40.5 |
4.5 |
* |
