The Next Bi-Monthly Monetary Policy Review

Posted On - 12 December, 2023 • By - C.V. Charanya Charanya


The Reserve Bank of India this month announced the launch of two significant surveys that stand as an integral resource for the formulation of Monetary Policy, the “Inflation Expectations Survey of Households” and the “Consumer Confidence Survey.” This Bi-Monthly Monetary Policy Review is scheduled to take place from December 6 to 8.

Foundation of the Surveys: –

Inflation Expectations Survey of Households:

The purpose of the “Inflation Expectations Survey of Households” is to collect subjective opinions regarding inflation and price changes. It is predicated on the individual consumption habits of households in India’s largest cities, including Chennai, Delhi, Bhopal, Chandigarh, and Thiruvananthapuram. Households are asked to provide both qualitative and quantitative answers to the inflation survey:

Qualitative range questions include inquiries about households’ expectations regarding price changes in the upcoming three months and one year, encompassing current inflation rates and forecasts for the next three months and one year. The following highlight the previous segments’ “Inflation Expectations Survey of Households” survey report –

  1. Households’ perception of current inflation moderated considering previous months flow; 
  2. Median inflation expectations of households declined respectively; inflation expectations have reverted to single-digits for the first time since the onset of the Covid-19 pandemic
  3. Households expect lower price and inflationary pressures for most of the product groups.
  4. Inflation expectations of all major group of respondents, except the self-employed category, has moderated.
  5. Three months ahead expectations on overall prices have highest coherence with respondents’ views on cost of services and non-food products, whereas one year ahead expectations are also more aligned with housing cost.

Consumer Confidence Survey:

The “Consumer Confidence Survey” aims to gauge households’ sentiments about different aspects of the economy. Participants are invited to express their opinions on general economic conditions, employment prospects, price levels, household income, and household spending.

Similar to the “Inflation Expectations Survey,” the “Consumer Confidence Survey” is conducted in 19 cities, including Bengaluru, Ahmedabad, Chandigarh, Chennai, Delhi, Bhopal, and Bhubaneswar. These insights contribute to comprehending the overall economic well-being and sentiments of households nationwide. The following highlights the previous segments’ “Consumer Confidence Survey” report: –

  1. Consumer confidence for that period reverted to its recovery path after a brief pause in July 2023 round of the survey; the current situation index (CSI) reached a four-year high on the back of respondents’ better assessment of the current general economic situation and employment conditions in September 2023.
  • The general economic outlook as well as the prospects for employment, income and spending are expected to improve further over the next year; the future expectations index (FEI) also reached a four-year high in the latest survey round,
  • Households remain highly optimistic about future earnings even though their sentiment on current earnings remained around its July 2023 level,
  • Respondents were less pessimistic on prevailing price levels and inflation, when compared to a year ago. Though price expectations for the year ahead remain negative, respondents’ pessimism on this front has moderated in the latest survey round.


The Indian economy has demonstrated remarkable resilience and progress amid a challenging global environment. Despite uncertainties and disruptions globally, India has sustained momentum and moved forward, credited to robust underlying macroeconomic fundamentals and buffers. Given this, the RBI can enhance its ability to preserve price stability and promote the overall economic well-being of the country by making more informed and data-driven decisions, incorporating households’ perspectives and expectations regarding inflation and general economic conditions.