Consumer sentiment rise on hope of better biz environment

Consumer sentiment in India rose slightly in August - the first improvement in four months - on hopes that the government policy will have an impact and continue to help the business environment, a Deutsche Boerse survey said. The MNI India Consumer Sentiment Indicator witnessed an uptick to 119.1 in August from 118.6 in July, marking the first improvement in four months. "RBI's more accommodative policy stance has helped stabilise consumer sentiment following the trend decline in 2014. While there are a few positives on the outlook for employment and business conditions, confidence is still bumping along at a lower level compared with last year," MNI Indicators Chief Economist Philip Uglow said. As per the report, consumer sentiment among Indian households has remained stable since the start of the year, but the trend since May 2014, when the Modi government came to power, has been one of gradual decline. "The August survey provided a tentative sign that respondents were increasingly convinced that government policy was starting to have an impact and will continue to help the business environment," the survey said.

Consumers revised their perception of the current business situation and their short-term expectations for it, with a growing number of respondents citing government policy reforms, it added. Consequently, respondents were more optimistic about the job market over the next 12 months, with the employment outlook indicator rising to the highest level since May 2013. On RBI's policy stance, the report said that relatively subdued level of consumer confidence, continued weak business confidence in its sister business survey, and the surprisingly low level of inflation, support the case for another cut this month.

RBI, which has lowered the benchmark rate by a combined 75 basis points so far this year in three instalments, is scheduled to hold its next bi-monthly monetary policy meet on September 29.