Indian consumer's pessimism hurdle for RBI bid to reverse economic slowdown

Consumption, which contributes nearly 60% to GDP, has been largely hurt by a shadow banking crisis

 If India’s central bank is banking on the consumer to revive the economy, it might be in for some disappointment.

Consumer confidence in India dropped further in July, as people grew more pessimistic about jobs and slowing growth in Asia’s third-largest economy.

That possibly explains the central bank’s unprecedented move on Wednesday. It lowered the benchmark interest rate by an unconventional 35 basis points, its fourth reduction this year to support a slowing economy. Consumption, which contributes nearly 60 per cent to GDP, has been largely hurt by a shadow banking crisis, and that in turn has dragged growth down to a