Font size:
Print
Urban Consumers in India
Context:
As the new year unfolds, urban consumers in India are experiencing a blend of hope and concern.
More on News
- On the positive side, retail inflation eased to a five-month low of 4.31% in January, offering some relief by alleviating household expenses.
- However, ongoing concerns about employment and stagnant income levels continue to cast a shadow over economic optimism.
- According to the Reserve Bank of India’s Consumer Confidence Survey, conducted across 19 major cities with 6,081 respondents (52.4% of whom were women), 55% of urban consumers reported no change in their income levels compared to the previous year—the highest such percentage in nearly 11 years.
Consumer Perceptions on Prices and Spending
- Price Trends: While 93% noted an increase in prices—marking the lowest level since July 2024—only 1% reported a decline, a trend that has persisted since the pandemic. More consumers now believe that prices have remained unchanged.
- Spending on Essentials: 87.6% of respondents saw an increase in essential spending—the lowest since September 2024.
- Fewer than 2% reported a decline, consistent with past trends, while about 11% believed their spending had remained stable.
- Spending on Non-Essential Items: There is a slight rise in the proportion of respondents who stated that their non-essential spending remained unchanged.
- Overall, spending conditions have shown slight improvement or at least remained stable.
Income and Employment Challenges
- Income Levels: The percentage of respondents whose income levels remained unchanged compared to a year ago reached a record high in January. Conversely, fewer individuals reported an increase or decrease in their income levels.
- Employment Outlook: There is a growing concern about job opportunities, with 42.7% of respondents reporting a decline in employment prospects compared to the previous year.
- Although job sentiment had been recovering after the pandemic, this trend reversed in mid-2024, leading to deeper pessimism in 2025.
Economic Sentiment and Outlook
- There is mounting financial pressure as job opportunities shrink and income stagnation persists.
- This economic strain has directly impacted consumer sentiment, with 43% of respondents stating that the overall economic situation had deteriorated in January compared to the same period last year—marking the highest level of economic pessimism in at least a year.
Despite easing inflation, the urban economic landscape remains challenging, with stagnant incomes and employment concerns overshadowing the marginal improvements in spending. Addressing these issues will be crucial for restoring confidence and economic stability in the coming months.
