Most respondents of the survey are, however, unlikely to increase non-essential spending in the next year

A Reserve Bank of India (RBI) survey reported the Consumer Confidence Index (CCI) plunging to 53.8 points for the current fiscal year but jumping to 105.4 points for a year ahead. The survey, based on responses from 5,342 households across 13 major cities, implied that consumers are upbeat about their prospects in a year, said a report by LiveMint.

On the fall in consumer confidence for the current year, analysts had a view that this is the reflection of economic adversity which led to people losing jobs amid India’s coronavirus lockdown. However, with the ease of restrictions, optimism is booming amongst the individuals, said the report.

Most respondents of the survey reported a reduction in discretionary spending in the past year but their overall spending increased. The survey found that they have no plans of increasing their non-essential spending in the year ahead, said the report.

LiveMint quoted chief economist Care Ratings Ltd Madan Sabnavis as having an opinion that there is a faint hope of the revival of the rural economy because of a good harvest season.

He further said, “If there is a good Kharif harvest, prices may come down, so incomes may not increase, and with more members in the family who have migrated back to their villages, per capita income will decline. So, in this uncertain environment, people will not spend.”

Another RBI survey of 802 companies was quoted in the report, “Manufacturers polled distinct betterment in key demand indicators in Q3 sustaining through Q1 of FY22. Overall business situation is expected to gradually improve by Q1 of next fiscal"

The Business Assessment Index (BAI) for the first quarter fell sharply to an all-time low of 55.3 in Q1 from 102.2 in the March quarter, the report said.

Households expect inflation to rise further, the report quoted a third RBI survey finding.