Hopeful India has become worried India. The economic euphoria inspired by the country’s seemingly inevitable march toward double-digit growth has soured. Faced with a slowing economy and political gridlock, the public mood is worsening along with GDP growth.
Indians are increasingly gloomy about economic conditions and worried about their children’s economic prospects. Gone is the sense of well-being and optimism that prevailed among economists and government officials just a few years ago when they were forecasting that Indian economic growth would soon surpass that in China.
In the last year, in a world where the Americans, the Europeans and even the Chinese all have good reason to worry about their economies, it is the Indians who have lost the greatest faith in their economic fortunes.
India’s recent travails suggest that past expectations for the economy were unrealistic. Nevertheless growth is often as much a function of confidence as it is of conditions on the ground. And it is this declining confidence that is cause for concern.
A simple snapshot of the Indian mood portrays relative satisfaction with the economy. Nearly half of Indians (49 per cent) surveyed are happy with current economic conditions in the country, according to a recent poll by the Pew Research Center’s Global Attitudes Project. And this level of satisfaction is nearly 26 percentage points higher than the median (23 per cent) found in the other 20 countries surveyed in 2012. Moreover, Indians are more optimistic (45 per cent) about their economy’s trajectory over the next year than are others surveyed (29 per cent).
Nevertheless, the change in sentiment since last year in India conveys a much more troubling picture. Just 38 per cent of Indians are satisfied with the way things are going in the country, which represents a 13 percentage point decline in satisfaction just since 2011. Only in Egypt and Brazil is there a comparable drop in national contentment over that period among the 17 countries Pew surveyed in both years.
The proportion of Indians (49 per cent) who think current economic conditions are good is down seven percentage points from 2011. Only in Egypt was there a comparable decline in people’s assessment of their national economy. And only 45 per cent of Indians think their economy will improve over the next 12 months. Such optimism has declined 15 points since 2011, again the largest fall-off among the 17 nations with comparable data.
The souring of Indians’ appraisal of national economic conditions and the decline in their belief in their economic future is unrivalled among some of their principal global competitors.
Indians’ evaluation of their current national economic situation trails that in China by 34 points and the self-assessment in Brazil by 16 points. Indians’ optimism about the next year lags that in Brazil by 39 points, in China by 38 points and in the United States by seven points. And, although several measures of Indian economic satisfaction exceed the global median, such Indian sentiment has fallen off sharply over the last year while global medians have stayed the same.
Contrary to their growing pessimism about the health and the future of the national economy, nearly two in three (64 per cent) Indians say their personal finances are good. But this self-assessment is 11 points lower than that in Brazil and 10 points lower than in Germany. Moreover, the difference in perception of personal finances versus national economic well-being in India was significantly lower than in nine other countries, suggesting that Indians’ assessments of their country’s economic plight and their opinion about their own circumstances are more intertwined than in many other societies.
And Indians are not terribly optimistic about young people’s economic prospects, although they have a somewhat more positive view than publics in other countries. About two-thirds (66 per cent) of the Indians surveyed think it will be difficult for young people to get a better job or to become wealthier than their parents. Such pessimism is relative, however. Among the 21 nations surveyed by the Pew Research Center in 2012, a median of 81 per cent forecast that today’s kids would have a tough time exceeding their parent’s well-being. By that measure, Indians remain fairly optimistic.
Despite their growing economic gloom and doubts about their children’s prospects, half of Indians acknowledge that they are better off than they were five years ago. Moreover, two-thirds say they have a better standard of living than their parents had at a comparable age.
Indians’ sense of their recent personal economic progress greatly exceeds such assessments by people in most other nations. Among the 20 other nations surveyed by the Pew Research Center in 2012, Indians are 27 percentage points more likely than the median to think they are financially ahead of where they were five years ago and 10 points more likely than the median to say they are doing better than their parents did at their age. Only the Brazilians and the Chinese are significantly more likely to say they are more prosperous than half a decade ago and to think that they are faring better than their parents.
Indians’ exuberant expectations about their economy have turned to foreboding. Economic attitudes have soured in most countries, but almost nowhere more than in India. The challenge in the months ahead will be not simply to turn around the economy, but to turn around the public mood.
The writer is director of Global Economic Attitudes at the Pew Research Center in Washington. The full results of the latest Pew Research Center India survey are available at http://pewglobal.org/
