Mumbai: Consumer confidence in India fell in the June quarter even as it rose worldwide, research firm Nielsen said, partly as Indians feared job losses due to business changes triggered by the implementation of goods and services tax (GST).
India scored a one-year low of 128 points in the index, ceding the No.1 spot it has held for a year to the Philippines. Worldwide, consumer confidence rose an average of 3 points during the quarter, Nielsen said.
Nielsen found that consumer sentiment on local job prospects for the next 12 months reduced by 8 percentage points to 76% for this period, compared with 84% during the December 2016 quarter, the last time the survey was held. For 20% of Indian respondents, job security was the biggest concern, up 3% from December 2016 and 2% from a year ago, Nielsen said. After jobs, the state of the economy was the biggest concern for 13% of respondents.
“The perceptions are collected during end-May and early-June—at a time when the nation was focusing on becoming compliant with GST scheduled to roll out shortly," Prasun Basu, president of Nielsen, South Asia, said in a press statement. “This impacted manufacturers and service providers, and many allied businesses—related to production, service operations, logistics and distribution. In some areas, this may have led to perceived or actual loss of employment, juggling of business decisions and, hence, a low sentiment on job prospects and job security for the coming quarters," he said.
Consumers also believed prices may increase under GST, making them cautious about spending, Basu said in the statement. 66% of urban Indians who responded to the survey said they believed the next 12 months to be a good time to buy things, a 4 percentage points drop from the December 2016 period although at similar levels as the quarter ended June 2016, at 65%. Meanwhile, 2% more respondents than in December 2016 said they would keep spare cash in savings, “a clear indication of the cautiousness of consumers in the wake of changes in the economy," Nielsen said.
Nielsen’s results mirror the Reserve Bank of India’s consumer confidence survey conducted in June this year, Basu said in the press statement.
Consumer sentiment of the current economic situation fell to pessimism for the first time since December 2016, even as the perception of income and job prospects also fell 2.6 index points, the RBI found.