Consumer sentiment remained largely subdued in the six months between March and September 2019, although it was significantly higher in rural areas, according to a survey conducted by Centre for Monitoring Indian Economy (CMIE).
According to CMIE's Consumer Pyramids Household Survey (CPHS), consumer sentiment in urban areas has been subdued, while in rural areas it has been soaring. The latest survey, released on Wednesday, noted that "urban sentiments are down, but they are not as depressed as the Reserve Bank of India (RBI) survey suggests".
"The CPHS urban Index of Current Economic Conditions declined by 1.2 per cent between March and September 2019 compared to the 14.5 per cent fall recorded by the RBI's Current Situation Index during the same period," CMIE said in its latest report.
Bucking the trend, the CPHS rural Index of Current Economic Conditions increased by 5.3 per cent over the same six months, the report said.
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The RBI publishes two major Consumer Confidence Surveys - the Current Situation Index and the Future Expectations Index. The RBI's Current Situation Index, which has recorded a persistent fall in consumer confidence, declined by 14.5 per cent in the six months between March and September 2019. During the same period, the RBI's Future Expectations Index dipped by 11.5 per cent. In September 2019, the Current Situation Index hit its lowest level in six years, since September 2013.
In case of household perceptions, there was a sharp contrast between perceptions of urban people regarding their experience over the past one year compared to the experiences of the rural folk, showed the survey.
Between March and September 2019, the CPHS urban Index of Consumer Expectations declined by 1.3 per cent while the rural Index of Consumer Expectations increased by 4.1 per cent.
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The urban people believed that the economic conditions had worsened, employment scenario had deteriorated, price levels had turned adverse and incomes had declined over the past year.
The rural Index of Consumer Sentiments that combines both, current economic conditions and consumer expectations, fell in April but rebounded strongly in May, the month of the Lok Sabha elections. The expectations were depressed in June, July and August, due to poor progress or errant behaviour of the south-west monsoon. However, the trend reversed in September as rural consumer expectations shot up to an all-time high of 113.13 (base = 100 during September-December 2015), helped by the recovery in rains and agricultural activity. The sharp rise in employment, improvement in monsoon and the onset of the festival season also contributed to this improvement, the CMIE survey noted.