Consumer sentiments highest in at least 62 months, shows CMIE data

Index of Consumer Sentiments index is at its highest level since at least March 2019

An index tracking consumer sentiment is now at its highest level in years.

The Index of Consumer Sentiments is at its highest level since at least March 2019, according to the latest data from the Centre for Monitoring Indian Economy (CMIE), which compiles the index.  

The consumer sentiment index, which monitors sentiments nationwide encompassing both urban and rural areas, has shown varying degrees of recovery across different regions.

The index was at 107.09 in March 2019 but experienced significant fluctuations following the onset of the Covid-19 pandemic, falling to 41.67 in May 2020.

By 2023, consumer sentiment began to rebound, reaching 106.74 in December 2023. However, it slightly declined to 104.43 in January 2024, but climbed back up to 110.9 by April 2024 (chart 1).

While rural consumer sentiment is at its highest level as far since 2019, urban consumer sentiment has dipped further to a seven-month low.

Compared to April 2019, the all-India consumer sentiment increased by 5 per cent, led by a 9.6 per cent increase for rural consumers.

It declined 4.7 per cent for urban consumers in the same period.

Individual income groups in the country continue to experience an evasive recovery.

The lowest income segment -- earning less than or equal to Rs 1 lakh a year -- has shown a decline of 3.4 per cent in consumer sentiment as of April 2024, compared to April 2019. (Chart 2)

Similarly, those earning between Rs 2 Lakh and Rs 5 Lakh struggled with a decline of 2 per cent. Those earning between Rs 5-10 lakh per annum have also experienced a dip of nearly three per cent. The highest income group, earning more than Rs 10 lakhs, are the furthest apart than what they were in 2019, a difference of 12.5 per cent, according to the index.

Only the income group between Rs 1 lakh and Rs 2 lakh per annum, experienced an increase by 8.3 per cent in consumer sentiment compared to 2019.

Nearly 27.92 per cent of household income groups on a net basis expect better conditions for their families a year from today, the survey showed.