The official estimates have once again put forth India as the fastest growing major economy. However, weak consumer sentiments remain concerns, according to data from various sources.
Even as India remains one of the fastest growing large economies in the world, consumer sentiment has remained weak. Notably, the Central Statistical Office (CSO) has revised its GDP growth estimate for 2017-18 to 7.2% and 2016-17 to 8.2%. The official estimates have once again put forth India as the fastest growing major economy. However, weak consumer sentiments remain concerns, according to data from various sources.
Consumer confidence reflects the degree of confidence consumers feel about their personal financial state,especially their ability to obtain and keep jobs. It helps in predicting the level of spending that consumers will engage in.
India Primary Consumer Sentiment Index (PCSI), fell by 7 per cent in the month of March 2019, indicating falling confidence levels.The index is prepared by Thomson Reuters in partnership with Ipsos, since 2010, which reflects monthly national survey of consumer attitudes on the current and future state of local economies, personal finance situations, savings and confidence to make large investments.
Consumer Confidence has fallen due to rising inflation and jobs scarcity, said Parijat Chakraborty, Country Service Lines Group Leader, Public Affairs, Corporate Reputation & Customer Experience, Ipsos India. The temporary cash crunch might have been due to enhanced tax saving investment as the survey mostly cover the urban salaried class. However, all these factors have a cascading effect, adding to pessimism, he added.
Further, recently released report by Federation Of Automobile Dealers Association (FADA) shows a decline in sales of about 2.6 per cent in the automobile industry in February 2019. This was primarily due to continued weak consumer demand for the last six months, said the report.
Additionally, while data from the consumer confidence survey (CCS) conducted by the Reserve Bank of India (RBI) for February, shows some increase in consumer confidence, it still remained in the pessimistic territory, noted the survey.
In the light of these events, it becomes imperative for the policy makers to address the fundamental problems in the economy which has kept the consumer confidence away from rising to higher levels.