Consumer sentiment Index: Consumer sentiment improves in first three weeks of February: CMIE

“This is hugely important because it implies the continuation of a trend of rising consumer sentiments that began in July 2021,” CMIE said.

“A nearly sustained growth in the ICS over eight months implies momentum, which in turn implies sustained improvement in household sentiments,” it added.

However, a complete recovery is still distant, CMIE said. ICS was at 105 in February 2020, just before the lockdown and had peaked to 110 in September 2019. The base of the index is 100 as in September-December 2015.

As per the CMIE data, in the first three weeks of February 11.8% of the responding households said that their current household income was higher than it was in the year-ago period compared to 5.1% who felt so last year.

“But, India has a long way to go before it reaches the pre-pandemic proportion of optimistic households, which was 30.6% in February 2020,” it said.

Further, more households are also optimistic regarding their future incomes. CMIE data shows in the first three weeks of February 2022, nearly 11.5% of the households believed that their incomes would be higher in a year’s time, though still far off from the pre pandemic level of 30%.

According to CMIE, the impact of a greater proportion of households experiencing higher incomes and expecting higher incomes in the future was perceptible in the proportion of households that considered these to be good times to spend on non-essentials.

In the first three weeks of February 2022, 9%of the households believed that this was a better time to buy consumer durables compared to a year ago compared to 4.9% who believed so during the same time last year.

“The sustained increase in household propensity to buy consumer durables, or non-essentials, in recent months is perhaps the best sign of the economic recovery,” CMIE concluded.