The most recent data from the Centre for Monitoring Indian Economy (CMIE) reveals that the Index of Consumer Sentiments has surged to its highest level since at least March 2019. This index, which monitors sentiments nationwide covering both urban and rural areas, has shown a notable recovery trend after experiencing fluctuations due to the Covid-19 pandemic. Following a low of 41.67 in May 2020, the index has seen a positive trajectory, reaching 106.74 in December 2023, but slightly dipping to 104.43 in January 2024 before climbing back up to 110.9 in April 2024.
The consumer sentiment index presents an interesting contrast between urban and rural areas. While rural consumer sentiment has hit its peak since 2019, urban consumer sentiment has further declined to a seven-month low. Comparing the consumer sentiment levels to April 2019, there has been a 5% increase nationwide, led by a significant 9.6% rise among rural consumers. In contrast, urban consumers witnessed a decrease of 4.7% during the same period, indicating differing trends between these two segments.
Income groups in India are also experiencing varied levels of recovery in consumer sentiment. The data shows that the lowest income segment, earning less than or equal to Rs 1 lakh annually, recorded a 3.4% decline in consumer sentiment compared to April 2019. Similarly, those earning between Rs 2 lakh and Rs 5 lakh struggled with a 2% decline, while the group earning between Rs 5-10 lakhs per annum saw a dip of nearly three percent. In contrast, the highest income group, earning over Rs 10 lakhs, showed the most significant difference from 2019, with a decline of 12.5%. Only the income group earning between Rs 1 lakh and Rs 2 lakh per annum experienced an 8.3% increase in consumer sentiment compared to 2019.
According to the survey conducted, nearly 27.92% of household income groups have expressed expectations of better conditions for their families in a year from now. This data provides insights into the varying sentiments prevailing among consumers across income groups and regions, highlighting the evolving landscape of consumer confidence post-pandemic.