According to CMIE, the Index of Consumer Sentiments (ICS) usually moves by a little less than 1% in a week. In the past 60 weeks, the average weekly increase in the ICS was 0.86% and the median was 0.93% while in the past year, the ICS increased by more than 6.7% only twice.
“This is therefore a rare occurrence and is entirely because of its surge in rural India,” it said in its weekly labour market analysis.
As per CMIE, for the week ended March 26, the rural ICS vaulted by 12.3% compared to a dip of 2% in urban ICS during the week.
This 12.3% increase in the ICS for rural India, however, does not help it recover entirely the ground it lost in the preceding four weeks, nevertheless, the overall ICS as of March 26 was 0.8% higher than the ICS of February, it said, adding March 2023 could therefore be the third consecutive month of an increase in consumer sentiments in India.
According to CMIE, much of the increase in the ICS in the 12 months that ended in February 2023 can be attributed to the sustained improvement in the sentiments of the relatively richer households.
“In the recent couple of months, households of relatively modest earnings have also recorded handsome improvements in sentiments though consumer sentiments of middle income households are improving at a much slower pace,” it said.CMIE data shows that the growth in ICS of high income households is fuelled by optimism they have about the future with the Index of Consumer Expectations (ICE) in February 2023 being 84% higher than it was in February 2022 while the overall ICE grew by only 40% and the growth was 32% for the middle-income group.
Even the Index of Current Economic Conditions (ICC) of the richer households grew impressively over the past year by 77% while the overall ICC increased by 40%, it said.
Further, during January and February 2023 while the ICS of the poorer households grew by 15.5% and that of the richer households grew by 11.2% , that of the middle income households grew by only 6%.
“In all three income groups, improvement in consumer expectations was higher than the improvement in current conditions. This is promising,” it said, adding that the poorest and richest group of households did not see any exceptional movement in consumer sentiments.
