This article presents the salient findings of the
Consumer Confidence Survey conducted in September
2011, the 6th round in the series. It gives an assessment
of the consumer sentiments of the respondents based on
their perceptions of the general economic conditions and
own financial situation. The assessments are analysed
in two parts, viz., current situation as compared to a
year ago and expectations for a year ahead.
The survey indicates a decline in the positive
perceptions on current economic conditions. Though more
than half of the respondents felt that their household
circumstances have become better off as compared with a
year ago, this proportion has declined in September 2011
as compared with June 2011. Optimism regarding an
increase in future income, though high, has been sliding
over the last four quarters. The degree of negative
perceptions on price levels for current and future are down
marginally in September 2011 as compared with June
2011. However, about 85 per cent of the respondents felt
that prices would continue to increase during the next
year. Overall the Current Situation Index as well as the
Future Expectations Index are estimated to be
marginally lower in September 2011 as compared with
June 2011.
I. Introduction
The change in consumer confidence has the
potential to affect real economic activities through
the changes in business sentiments. Thus,
the current and expected confidence on economic
and personal financial situations, are of particular
relevance for policy purpose. In this context,
consumer confidence surveys are carried out to
obtain qualitative information on the above for
monitoring the economic situation. Reserve Bank
of India has initiated Quarterly Consumer Confidence Surve since June 2010. The latest round
of the survey was conducted in September 2011. Key
highlights of the survey results are presented in this
report.
II. Sampling Design
The survey covers six metropolitan cities, viz.,
Bangalore, Chennai, Hyderabad, Kolkata, Mumbai
and New Delhi. Each city is divided into three major
areas and each major area is further divided into
three sub-areas. From each sub-area, about 100
respondents are selected randomly. For each round
of survey 5,400 respondents are selected (900
respondents from each city). The respondents are
well-spread across the cities to provide good
geographical coverage.
III. Structure of the Survey Questionnaire
The survey schedule consists of qualitative
questions pertaining to impression about economic
conditions, views on household circumstances,
perceptions on price level, developments in real
estate prices and views on growth potential of the
Indian economy. The survey questionnaire is given
in Annex I.
IV. Methodology used for Analysis of
Survey Data
The methodology followed for the analysis of
the survey data is given in Annex II.
V. Survey Results: Key Highlights
V.1 Economic Conditions and Household
Circumstances
• There is significant decline in the positive
perceptions on current economic conditions
from 61.2 per cent in the last quarter to 56.9 per
cent in September 2011 (Chart 1).
• Positive opinion for the future economic
conditions has also declined to 59.5 from 62.8
per cent in June 2011 (Chart 1).
V.2 Households Circumstances
• Though more than half of the respondents
felt that their household circumstances
have become better off, this proportion
has declined as compared to June 2011
(Chart 2).
• The net response on household circumstances
has remained almost the same as that
observed in June 2011. This is due to decrease in positive as well as negative responses and
increase in neutral responses (Chart 3).
• About half of the respondents, who reported
better-off household circumstances as compared
with a year ago, reported increase in salary and
business income as the main factors for this
improvement (Chart 4).
• About 18 per cent respondents reported that
their household circumstances became worse off
due to increase in price level. This proportion
has declined during the last four quarters from
27.5 per cent in December 2010 to 17.7 per cent
in September 2011 (Chart 5).
V.3 Income
• Optimism regarding increase in future income,
though high, has been sliding consistently over
the last four quarters (Chart 6).
• The net response regarding future income has
declined significantly as compared with the last
quarter (Chart 7).
V.4 Consumer Spending
• About 71 per cent of the respondents reported
increase in spending as compared with a
year ago. This proportion in response to future spending is less at about 66 per cent
(Chart 8).
• Nearly 44 per cent of the respondents reported
that their spending has increased due to an
increase in current income. The other major
cause of an increase in spending was
the increase in cost of goods and services
(Chart 9).
V.5 Price Level
• The degree of negative perceptions on price
levels for current and future periods are down marginally in September 2011 as compared with
June 2011. However, about 85 per cent of the
respondents felt that prices would continue to
increase during the next year (Chart 10).
• Net response on price levels for the current
period has improved (Chart 11).
V.6 Perceptions on other Macroeconomic
Indicators
V.6.1 Interest Rates
• Nearly three-fourth of the respondents were of
the view that the current interest rates are high from borrowers’ viewpoint. Only about a fifth
of the respondents felt that interest rates, from
borrower’s viewpoint, were appropriate
(Chart 12).
• More than 54 per cent of the respondents
reported that interest rates on deposits were low.
One third of the respondents felt that interest
on deposits were appropriate (Chart 12).
V.6.2 Employment Conditions
• The respondents are more optimistic on
employment conditions in the current quarter
than the last quarter (Chart 13).
• About half of the respondents perceived that
employment prospects are favourable in the
current quarter (Chart 13).
V.6.3 Future Developments in Real Estate
Prices
• The proportion of respondents perceiving an
increase in future real estate prices has declined
marginally (Chart 14).
V.6.4 Growth Potential of the Economy
• The respondents were asked about their views
on growth potential of economy in the long-run.Most of the respondents have reported that the
economy has potential to grow above the current
level (Chart 15).
V.7 Current Situation Index and Future
Expectations Index
• The Current Situation Index, a composite
indicator based on the net responses of selected
indicators, has marginally decreased to 115.0 in
September 2011 as compared to 116.3 in June
2011.This is largely because of decrease in
net responses on economic conditions and
spending (Chart 16).
• The Future Expectations Index is estimated
to be marginally lower at 118.7 in September 2011 as compared to 120.2 in June 2011
(Chart 17).
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