Mumbai: The CNBC-TV18 Boston Analytics Consumer Confidence Index has inched up 0.8% to 74.1 in April from 73.5 in March.
Expressing hope? The survey, however, reveals that real spending has not improved yet. Harikrishna Katragadda / Mint
The index, derived from monthly interviews of nearly 10,000 respondents across 15 Indian cities, consists of two sub-indices—the Current Situations Index and the Future Expectations Index.
The Future Expectations Index is now higher than the Current Situation Index for the fourth consecutive month. The trend suggests that consumers are expecting things to get better in the next 12 months.
The Current Situation Index has flattened out in the last month, recording an almost insignificant rise of 0.14% from 71.3 in March to 71.4 in April. The Future Expectations Index increased by 0.65% from 77.1 March to 77.6 in April.
The uptick in confidence was driven by expectations of improvement in general economic conditions and household financial conditions. The survey, however, revealed that real spending has not improved yet. The consumer spending confidence component of the index continued to weaken, dropping 7.2% in April over March. Consumers continued to postpone discretionary purchases, particularly in cities and big towns.
Confidence in urban areas has improved a bit as employment confidence inched up 3.1% in April after a continuous decline for 10 months.
Among other reasons, expectations of a good rabi harvest season may have boosted sentiments.
“The Indian consumer is expressing hope, at least in sentiment, that current economic stimulus along with promises of economic policy changes being made during the current election campaign may improve future economic conditions,” said Sam Thomas, director of research and development at Boston Analytics. “The April numbers do not yet indicate a trend reversal regarding the personal circumstances of the consumer. In particular, the consumer remains significantly pessimistic about the job market and spending plans on durable goods.”