Consumer Confidence Survey (CCS) India

RBI survey shows improvement in consumer sentiments in Dec'18.

Note: Consumer confidence survey was published quarterly by the Reserve Bank of India (RBI) before March 2016.

Published bi-monthly by the RBI. Updated to the month of December 2018 (published on February 7, 2019)

Recent Data Trend

In the December round of Consumer Confidence Survey, the households have turned optimistic over employment conditions and income levels. Their confidence in the current economic conditions improved moderately as depicted by the current situation index (CSI) which rose from 93.9% to 96.7% in the December round. However, consumers seem more buoyant about their expectations over the next one year. It also shows an improvement in the view on current employment conditions as a higher proportion of respondents (35.6%) indicated employment scenario to have improved currently and the consumers (60.3%) expect concerns over unemployment to reduce one year ahead. The results from Dec'18 round of consumer confidence survey looks contrary to the recent views on the shortage of employment opportunities.

On the inflation front, Indian consumers (84.3%) do not expect general prices to rise in the current period especially for food and non-food items. There was a decline in the number of respondents (71.6%) expecting the prices to increase in the next one year. This fall in inflation expectations of households reflected the continued decline in food and fuel prices stated by the RBI in its sixth bi-monthly meeting.

Further, while respondents mostly reported unchanged incomes in the year gone by, the number of respondents (roughly 63.5%) who felt that their income will improve saw an increase. Sentiments on spending remained almost unchanged from the previous round. Households agreed that their expenses on essential and non-essential items have decreased but 46.1% said that it will increase in the future. This could be because of the perception that inflation cannot continue to remain as low as it has reached in recent months.

Overall if the improvement in consumer confidence and in terms of future expectations index (FEI) continues to persist, it could have an impact on the current government's electoral mandate. Moreover, the surprise move by the RBI to reduce the repo rate by 25 basis points to 6.25% can make it cheaper for consumers and industries to borrow and thereby boost growth.

Brief Overview

Consumer confidence survey (CCS) has been conducted by the Reserve Bank of India (RBI) on a quarterly basis since June 2010 and on a bi-monthly basis since March 2016. The survey obtains information on urban consumer sentiments and captures qualitative responses on questions pertaining to economic conditions, household circumstances, income, spending, prices, etc. For each round of the survey, approx 5400 respondents (aged 21 years and above) are canvassed in six metropolitan cities of Bangalore, Chennai, Delhi, Hyderabad, Kolkata, and Mumbai. The responses are mostly in two parts- current situation as compared to a year ago and expectations a year ahead. Expectations on prices and consumer spending are in three forms: increased, remained the same and decreased or positive, neutral and negative.

To combine the consumer confidence responses on various parameters, two sub-indices are calculated by the RBI: Current Situation Index (CSI) that reflects the current situation as compared to one year ago and Future Expectation Index (FEI) that reflects expectations one year ahead. CSI and FEI are compiled on the basis of net responses on the economic situation, income, spending, employment and the price level for the current period and a year ahead, respectively. CSI/FEI = 100 + Average of Net Responses of the above parameters. CSI and FEI are compiled on the basis of net responses on the economic situation, income, spending, employment and the price level for the current period and a year ahead, respectively. CSI/FEI = 100 + Average of Net Responses of the above parameters. The CSI and the FEI can take values between 0 and 200. An index value over 100 implies that consumers are optimistic about the current/future situation and vice versa.

The responses to the main variables of the survey, viz, income, spending, employment, etc are recorded in terms of percentage. Percentage responses on income and spending are the respondents' own view, i.e, personal income and personal spending.

For more information, please visit the official government website.

Next Release Date: April 5, 2019