New Delhi, Oct 8: More than half of urban households believe that economic conditions have deteriorated over the past year, reflecting growing concerns around prices, employment and household finances, according to a Reserve Bank of India survey.
The survey found that 54.5 per cent of respondents felt that the overall economic situation had worsened during the past year, up from 50.5 per cent in July and 40.9 per cent a year earlier.
Only 25.3 per cent of households said they had seen an improvement in economic conditions, highlighting the gap between broader economic performance and how households are experiencing the economy in their daily lives.
Rising Prices Remain a Major Concern
Inflation and the cost of everyday living continue to influence household sentiment. Around 95 per cent of respondents said prices had increased over the past year, while more than 84 per cent expected prices to rise further over the coming year.
For households, higher prices can put pressure on monthly budgets even when overall economic growth remains steady. Families may have to allocate more of their income towards essentials such as food, housing, transport and other regular expenses.
This can also affect how much households are able to save or spend on discretionary items.
Employment Outlook Adds to Concerns
Employment conditions remain another important factor influencing consumer confidence.
Nearly 49.5 per cent of respondents said employment conditions had worsened over the past year. Looking ahead, about 35.5 per cent expected the employment situation to deteriorate further over the next 12 months.
Job security and income stability are closely linked to household spending decisions. When families are uncertain about employment or future earnings, they may become more cautious about major purchases and long-term financial commitments.
Spending Remains Relatively Resilient
Despite concerns over the broader economy, household spending has not collapsed.
Around 83.7 per cent of respondents reported higher spending compared with a year earlier, indicating that consumers continue to meet their day-to-day requirements and maintain spending despite economic concerns.
However, higher spending does not necessarily mean households have greater purchasing power. When prices rise, families may spend more simply to maintain the same level of consumption.
Future Expectations Still Offer Some Support
The survey also presents a mixed picture of consumer sentiment. While the Current Situation Index remained below the neutral level of 100, indicating continued caution about present conditions, future expectations remained above the neutral mark.
This suggests that although many households remain concerned about the current economic environment, a section of consumers continues to believe that conditions could improve over time.
What the Survey Signals for the Economy
Consumer confidence is an important indicator because household sentiment can influence spending, saving and investment decisions.
The latest findings highlight a disconnect between headline economic activity and household perceptions. While spending remains relatively resilient, concerns over prices, employment and financial security continue to shape how urban families view the economy.
For a stronger and more broad-based recovery in consumer confidence, households will need to see sustained improvement in income growth, employment opportunities and purchasing power.
The survey therefore offers a mixed message: urban consumers continue to spend, but many remain cautious about the economic environment and are looking for greater stability in their everyday finances.
