Worsening economic conditions have dampened perception of jobs, employment, income and future economic situation among consumers in the top six cities, according to a survey by the Reserve Bank of India.
Slipping into negative zone for the first time since September 2014, households’ current perception on the economic situation worsened significantly in March 2017.
Confidence in current income levels improved marginally in March after falling drastically in December 2016. Even after demonetisation, outlook on income levels was less optimistic for the year ahead, the survey highlighted.
According to the March 2017 round of the Consumer Confidence Survey, “The Current Situation Index entered into the pessimistic zone to 98.7 in March 2017 (from 102.0 in December 2017) due to worsening sentiments on economic conditions and price situation.”
Additionally, the Future Expectations Index (FEI) also declined sharply to 121.7 in March 2017 from 129.7 in the December 2016 round, with the outlook on all parameters, barring spending, worsening.
Although 39 percent of respondents, both in December and March, felt that the employment situation has worsened, about 52.8 percent are optimistic that it will improve in the year ahead. This confidence, has however, come down from 57.3 percent in December last year.
Over 80 percent households feel that the prices of products and services or the inflation levels have increased and will continue to do so.
The data is compiled using net responses on general economic conditions, income, spending, employment scenario and price situation for current and one-year ahead periods.
Overall spending showed an increase in March 2017 and is expected to rise in the next year ahead for both essential and non-essential spending.
The survey with 4,890 responses was conducted by the central bank in six metropolitan cities - Bengaluru, Chennai, Hyderabad Kolkata, Mumbai, and New Delhi.