Given the current economic slowdown, nearly half of the Indian households are planning to reduce discretionary spending during the March-June period and are focusing on saving, says a survey by social media platform LocalCircles.
The biannual Mood of the Consumer 2020 survey by LocalCircles reveals that about 45 per cent of households plan to reduce discretionary spending, including dining out, movies, luxury products, confectionery, fashion, etc.
Among the 45 per cent respondents who said they plan to cut costs, 9 per cent said they would reduce discretionary spending by over 75 per cent over the next four months. About 10 per cent respondents said that they would cut expenses between 50 and 75 per cent; 11 per cent said they would cut spending between 25 and 50 per cent; and 15 per cent respondents said they planned to reduce their discretionary expenditure up to 25 per cent.
About 37 per cent of the respondents said they were unlikely to make any changes to their spending pattern, while 12 per cent were unsure about it, the survey showed. There were only 6 per cent of the surveyed households that were willing to spend more, notwithstanding the economic downturn.
Feeling the heat from the economic slowdown, 65 per cent of the households said they felt squeezed or distressed when it comes to their earnings and expenses over the last 12 months. In terms of savings, 57 per cent households said their savings have reduced in the last 12 months while 18 per cent said it did not show any increase.
The survey also revealed that households are relying more on the conventional banking system to save their money, with 45 per cent of the households keeping the majority of their savings in fixed deposits or savings accounts.
The survey showed that Indian households are increasingly pessimistic about their future. According to it, only 29 per cent households expected earnings to increase in the coming 12 months. This is a big fall compared to the survey conducted last May, when 44 per cent expected a rise in income.
Focus on savings
43,000 households surveyed
218 districts covered
6 per cent households only were willing to spend more
Savings reduce
About 57 per cent households surveyed said their savings have reduced in the last 12 months while 18 per cent said it did not show any increase.