There has been a steady increase in household spending among 58 per cent of families, complemented by a significant rise in essential spending, reflecting a conscious prioritisation of daily necessities, according to Axis My India’s latest India Consumer Sentiment Index (CSI). Amidst the festive sparkle, Axis My India report said, a discernible 18% of consumers are embracing the joy of luxury, while a robust 79% display a preference for economical choices, showcasing a healthy balance in financial strategies.
As the New Year dawns, it said, a focused 14 per cent of the populace are seen engaging in proactive financial planning, indicative of a growing financial awareness and foresight. The December net CSI score, calculated by percentage increase minus percentage decrease in sentiment, is at +10.3, which is an increase of +0.3 from the last month, it said.
The sentiment analysis delves into five relevant sub-indices – overall household spending, spending on essential and non-essential items, spending on healthcare, media consumption habits, entertainment & tourism trends.
The survey used computer-aided telephonic interviews and included 4603 participants from 35 states and UTs. Among them, 70 per cent were from rural areas and 30 per cent from urban areas. In terms of regions, 25 per cent were from the North, 27 per cent from the East, 31 per cent from the West, and 17 per cent from the South of India. Among the participants, 59 per cent were male and 41 per cent were female. Looking at the largest groups, 28 per cent were aged between 36 and 50 years old, while 27 per cent were aged between 26 and 35 years old.
Pradeep Gupta, Chairman & MD, Axis My India, said, “As we start the New Year, our findings offer a lens into the dynamic interplay of consumer choices and financial strategies. The festive period, with its unique blend of luxury spending and economical choices, reflects a complex yet telling narrative about our society’s financial adaptability and prudence. This nuanced approach to consumption and fiscal planning indicates a deepening awareness among individuals and families of the need to balance present enjoyment with future security. Looking ahead, these trends suggest a positive trajectory for the coming year – one where mindful spending, strategic financial resolutions, and an embrace of both traditional and digital realms signify a society that is not only adapting to changing economic landscapes but also shaping them. As we step into the New Year, we see a horizon where financial decisions are increasingly informed by a blend of immediate needs and long-term aspirations, heralding a future rich with informed choices and sustainable growth.”
Household spending
According to the Axis My India report, overall household spending has increased for 58 per cent of the families and consumption remained the same for 35 per cent of families. Spends on essentials like personal care & household items have increased for 48 per cent of families. Spends on non-essential & discretionary products like AC, car, and refrigerators have increased for 13 per cent of families. Expenses towards health-related items such as vitamins, tests, and healthy food have surged for 40 per cent of the families and consumption remains the same for 46 per cent of families. The health score which has a negative connotation i.e., the less the spends on health items the better the sentiments, has a net score value of -26 this month. Consumption of media (TV, Internet, Radio, etc.) has increased for 22 per cent of families which is a decrease by 1 per cent from last month. The net score, which was +2 last month, is at +3 this month. Mobility has increased for 7 per cent of the families. The net score, which was -5 last month, is at -6 this month. Mobility remains the same for 80 per cent of the families.
Further, per the report, during the festive season, 18 per cent of the respondents said that they plan to splurge on luxury items such as high-end electronics and fashion. And 79 per cent of the respondents intend to observe the festivities more economically, opting for budget-friendly choices as the year concludes. “This contrast in spending habits offers a glimpse into the diverse financial strategies of households, navigating between festive indulgence and financial prudence,” it said.
The survey also said that 14 per cent of respondents are set to ring in the New Year with financial resolutions, and 83 per cent of the respondents will step into the New Year without financial resolutions. In the spirit of fresh starts, a dedicated 14 per cent of the respondents are proactive in their approach and engage in specific financial planning activities such as tax planning and investment reviews. 84 per cent of the respondents do not indulge in participating in these financial planning activities.
Furthermore, the landscape of media consumption has significantly shifted in the wake of widespread smartphone use and affordable internet access. “As streaming platforms gain momentum, fuelled by the digital revolution, 25 per cent of respondents have pivoted away from traditional cable or satellite subscriptions, opting instead for the on-demand convenience of digital streaming services. Despite this trend, a notable 40 per cent of the respondents continue to engage with media through the conventional route of cable subscriptions. This persistence of traditional media consumption alongside the rise of streaming highlights the coexistence of old and new media paradigms, reflecting a diverse consumer base with varied preferences and habits in the digital age,” it stated.