Consumers not confident about economy or jobs: RBI Survey

Even as political parties are busy stepping up their game for the 2019 general elections, Indian consumers have shown a lack of optimism about the current state of economic conditions and employment scenario in the country, according to a recent survey by the Reserve Bank of India (RBI).

The September round of the Consumer Confidence Survey by RBI revealed that the overall Consumer Confidence Index in India has dropped to 94.8, down from 98.3 in June.

RBI’s Consumer Confidence Survey serves as an indicator of consumers’ perceptions and expectations on the general economic situation, the employment scenario, the overall price situation and their own income and spending.

Indian consumers are even more pessimistic about the employment scenario in India now as compared to their sentiments in December 2013, just before the previous general elections.

In the September round, 45.5% of respondents felt the employment situation in India had worsened, against 34.4% in December 2013. The net response (percentage of respondents who think the conditions have improved deducted from the ones who thought it worsened) too slackened to a negative 10.3%, compared to a negative 5.3% in December 2013.

The one-year-ahead expectations on employment, too, weren’t very encouraging as the net response stood at 25.1% in September, down from 27.5% in June, when the last survey was published.

Even the perception of income among consumers has worsened, compared to the sentiments before the previous general elections as the net response dropped to a 4.9%, against 15.4% in December 2013.

However, the one-year-ahead expectations for income showed heightened consumer optimism in September (at 51.3%) compared to December 2013 (37.2%) and also June (40.5%).

“Responses on the general economic situation largely tracked those on the employment situation with the outlook on employment for the year ahead dipping below expectations in the previous round,” RBI said in the note.

There was, however, an improvement in net response on inflation, from a negative 93% in December 2013 to a negative 74.7% in September.

Also, the Future Expectations Index rose from 119.8 in June to 121.1 in September, signalling optimism among consumers about the room for improvement; in December 2013, the number was 100.3.

The marginal uptick in the Future Expectations Index is on the back of optimistic sentiments on future income and the evolving price situation, RBI said.

The survey was conducted in 13 major cities—Ahmedabad, Bengaluru, Bhopal, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Kolkata, Lucknow, Mumbai, Patna and Thiruvananthapuram—and obtained 5,364 responses.