Actionable insights on equities, fixed-income, macros and personal finance Start 14-Days Free Trial
Actionable investing insights Get Free Trial

Survey: How the lockdown is affecting households in India


Under half of urban India (44%) are seeing no impact on their incomes because of the Coronavirus-induced lockdown. However only a third (33%) foresee no reduction in discretionary expenses over the next 6-9 months.

Put another way, more than half of the working population (white-collar) are currently seeing a reduction in their regular incomes, ranging from 25% to 100%.

And 2/3rd of this population will cancel or postpone discretionary spending on vacations, consumer durables, and electronics in the near future.

These are a couple of interesting findings from a short dipstick survey we did this week. Of course, bombastic opening statements notwithstanding, we are talking of a small and skewed sample of close to 700 respondents from across the country who have internet and smartphone / personal computer access. 75% of those respondents are from the major metros. So do take the “findings” with a pinch of salt.

CovidLockDown Survey Results

Who did we survey?

Survey: How the lockdown is affecting households in India

68% of respondents are salaried which is important when interpreting the impact on incomes.

Survey: How the lockdown is affecting households in India

Over half our respondents are in the mid-career phase between 35 and 50. Another 39% are early-stage.

93% of our respondents are male, so unfortunately not representative of how women are thinking in these times.

What did we ask (and find)? We really only asked two basic questions:

  1. The impact of the lockdown on incomes
  2. The impact of the lockdown on discretionary purchases in the near future

Lockdown Impact on Incomes

Chart shows impact on income since the lockdown. Numbers are a percentage of respondents of that income type. Each column totals to 100.

Survey: How the lockdown is affecting households in India

At the best of times, talk to someone running a small business and they will envy the regular direct deposit those with a salary enjoy.

Now more than ever, that certainty is at a significant premium to people who either work for themselves or run a business.

While 30% of salaried folks are seeing some impact to their incomes, that number is a whopping 85% for those running their own business and 61% for freelancers.

Also note that nearly half (47%) of business owners are seeing a complete loss of income currently compared to 2% of salary earners. An emergency fund has never been more essential.

Longer-term Impact – Points to ponder

  • Will this make people more averse to the risk of uncertain incomes from the gig economy or dissuade those trying to build self-sustaining businesses? Will that job at a Seed-funded startup look not as hot compared to working for Accenture?
  • How about the small business owner who until earlier this year might have been considering adding a couple of machines and manpower to expand but now might decide to conserve the cash for times like these?

Lockdown Impact on Expenditure

Survey: How the lockdown is affecting households in India

Whether incomes have been impacted or not, 2/3rd of households said they will reduce their discretionary spending for the rest of the year.

Only 31% said they would be making no changes, and a small minority possibly picked the joke answer and said they might spend more!

If this is truly indicative, how will earnings in Q2 and Q3 then look for companies making consumer durables and electronics? Not just that, how will they look Q4 and onwards?

Longer-term Impact – Points to ponder

  • Will big-ticket consumption be postponed? Or will it be cancelled?
  • Will upgrade/refresh cycles for smartphones and air conditioners become longer?
  • Will some forms of discretionary spend see a boost as people say “life’s too short, eat the dessert first”. Which ones might they be? Will people be more or less willing to go out and spend in movie theaters over taking expensive international vacations?
  • Will “solo” or “at-home” forms of entertainment like gaming consoles be more attractive? We all know someone who’s regressed to their teen years of playing Call of Duty till 4am

Another question specifically about the auto sector on whether people are planning to buy personal mobility.

Survey: How the lockdown is affecting households in India

Surprisingly, 14% said they are planning to buy either a four or a two-wheeler in the near future.

  • Does this mean people are going to feel safer on/in their own modes of communication?

No one really knows just yet.

We’ve been saying in past posts on picking an investment framework for an uncertain world.

Survey: How the lockdown is affecting households in India

click to go to post

Every probable future is just that, one of many probabilities.

This survey is taken in the middle of the lockdown. Shops aren’t open. When they open, will all the questions have different answers if asked then?

Maybe life will go back to much like how it was. Or it will change in some fundamental ways. It’ll be an interesting next few months.

Let us know what you think. Connect with us @capitalmind_in

Get access to actionable and unbiased investment insight including debt and equity portfolios (Long-Term MultiCap, Momentum, Dividend Yield, Fixed Income) by upgrading to Premium. Use Coupon Code RESET21 to get 21% off Capitalmind Premium.


Like our content? Join Capitalmind Premium.

  • Equity, fixed income, macro and personal finance research
  • Model equity and fixed-income portfolios
  • Exclusive apps, tutorials, and member community
Subscribe Now Or start with a free-trial