Consumer Confidence in India Still Low Despite Years of Economic Growth

Mumbai, 22 May: RBI survey shows six years of pessimism among urban households even as GDP rises steadily

India’s economy has posted solid growth over the past six years, cementing its position among the world’s fastest-growing economies. Yet, a closer look at how people feel about their financial wellbeing reveals a striking contrast: consumer confidence in India remains subdued.

According to the Reserve Bank of India’s Consumer Confidence Survey, conducted across 19 major cities, urban households have consistently expressed a bleak outlook. The Current Situation Index (CSI)—which reflects how consumers feel about their income, spending, and employment compared to a year ago—has remained below 100 since June 2017. A score below 100 signifies pessimism.

What the Consumer Confidence Index Reveals

The CSI reflects how consumers perceive their current economic situation compared to a year ago. A score below 100 indicates a pessimistic outlook. Here’s a snapshot of key trends:

Source: RBI CCS, MOSPI, RBI Bulletin

Despite steady improvement in economic metrics, consumer sentiment hasn’t caught up. This disconnect is becoming too significant to ignore.

Income Growth Isn’t Easing Pressure

While incomes have risen in absolute terms, so have everyday costs. In urban India, expenses on food, rent, transport, school fees, and utilities have climbed steadily, often outpacing wage growth. Much of this additional income is being spent on maintaining basic needs rather than improving quality of life.

Inflation isn’t just a statistic—it’s deeply personal. The prices of essentials like milk, vegetables, cooking gas, and electricity are felt more immediately and sharply than general inflation data reflects.

The Hidden Strain on Households

Another key factor behind weak sentiment is the growing effort required to sustain the same standard of living. Many families report taking on longer work hours, side jobs, or cutting back on discretionary expenses to stay afloat.

Even those earning more often say they don’t feel better off—particularly when it means sacrificing time, well-being, or mental peace. When daily life becomes harder to maintain, confidence naturally dips.

An Uneven Recovery

India’s economic rebound has not been evenly shared. Higher-income households have recovered faster, increasing their consumption and investments. But for middle- and lower-middle-income groups, the journey has been far more difficult.

This has led to a two-speed recovery, where one segment of the population moves ahead while the other struggles to keep pace. This disparity is likely a key reason why aggregate economic data looks healthy, but consumer sentiment remains subdued.

Bottomline

India’s economic numbers may look strong, but the lived experience for many urban households tells a more complex story. Consumer confidence in India is shaped not just by income, but by the stability, effort, and emotional toll associated with sustaining that income.

The message from the ground is clear: headline growth is not enough. Until the benefits of economic progress are felt directly in people’s wallets, homes, and day-to-day lives, consumer sentiment will continue to lag.