You are correct- "the economic performance of this government doesn’t affect its electoral outcomes". But how long this will continue? How is it that people are not realising that the economy is not doing well? Is it because the competitive welfare schemes, like crediting cash into bank accounts, is lulling them into false illusions? How long a government keep giving cash doles to the entire population? What demand can one generate based on doles? It is so distressing to see the other day Khejriwal announcing Rs 2100/- per month to women in Delhi. Do you share this distress or am I the odd man?
I haven't yet seen data on rural and urban consumption and which one is lagging behind - if it's urban consumption, then these doles will only do so much - it might boost demand in specific sectors in the short term - mostly FMCG, I would think?
However, the author is spot-on about consumer behaviour - it's not so simple to say that if you hand money to consumers, they will just spend it.
You are correct- "the economic performance of this government doesn’t affect its electoral outcomes". But how long this will continue? How is it that people are not realising that the economy is not doing well? Is it because the competitive welfare schemes, like crediting cash into bank accounts, is lulling them into false illusions? How long a government keep giving cash doles to the entire population? What demand can one generate based on doles? It is so distressing to see the other day Khejriwal announcing Rs 2100/- per month to women in Delhi. Do you share this distress or am I the odd man?
I haven't yet seen data on rural and urban consumption and which one is lagging behind - if it's urban consumption, then these doles will only do so much - it might boost demand in specific sectors in the short term - mostly FMCG, I would think?
However, the author is spot-on about consumer behaviour - it's not so simple to say that if you hand money to consumers, they will just spend it.
Excellent Analysis