Consumer Confidence Survey by RBI: What is it and why is it conducted?
On June 4, 2020, the Reserve Bank of India released the results of its consumer confidence survey. The survey was conducted in thirteen cities on the economy, employment prospects, etc.
The survey shows that Consumer confidence collapsed in May 2020. The Current Situation Index (CSI) in May 2020 has touched a historic low of 63.7 while it was 85.6 in March 2020.
Not only this, the people who were a part of this survey were also dejected about the coming year. The Future Expectations Index (FEI) also recorded a sharp fall in May 2020 to 97.9 as compared to 115.2 in March 2020. This index has fallen for the first time since the Modi's Administration tenure.
What is the Consumer Confidence Index (CCI)?
The Consumer Confidence Index (CCI) is a survey that is conducted every two months to measure how optimistic or pessimistic the consumers are regarding their financial situation. The current index measures the change in consumer perception on the financial situation in the last year and the future expectations index measures what the consumer thinks about his financial situation in the coming one year. The main variables of the survey are-- Economic situation, Employment, Price Level, Income and Spending.
How was the survey conducted?
Keeping in view the COVID-19 pandemic, the Reserve Bank of India conducted a survey through the telephonic interviews between May 5- May 7, 2020. The survey was conducted in thirteen major cities-- Ahmedabad, Bengaluru, Bhopal, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Kolkata, Lucknow, Mumbai, Patna, and Thiruvananthapuram.
The survey was conducted across 5,300 households on the general economic situation, employment scenario, overall price situation and own income and spending.
The report stated that the consumer perception on the general economic situation, employment scenario and household income plunged deeper into contraction zone while expectation on the general economic situation and employment scenario for the year ahead were also pessimistic. The report further added that consumers made a sharp cut in their spending keeping the COVID-19 pandemic situation in mind.