3. MNI India Consumer Report - May 2014 3
MNI India Consumer Report - May 2014
Contents
4 Editorial
6 Executive Summary
12 Economic Landscape
16 Indicators
17 MNI India Consumer Indicator
24 Personal Finances
27 Current Business Conditions
30 Durable Buying Conditions
31 Employment Outlook
33 Prices Sentiment
36 Interest Rate Expectations Indicator
37 Stock Investment Indicator
41 Real Estate Investment Indicator
44 Car Purchase Indicator
46 Consumer Sentiment - Regions
50 Consumer Sentiment - Income Group
52 What the Panel Said
55 Data Tables
63 Methodology
4. Spitzzeile Titel4
Indians, disillusioned with the current leadership
and desperate for change, have given Narendra
Modi a clear mandate. The key question is whether
he can deliver on his pledges and live up to such
high expectations.
MODIfied India
5. MNI India Consumer Report - May 2014 5
Few would deny the Indian government has been
heavily criticised for not implementing economic
reforms and for an inability to control persistently high
inflation, both of which have impeded economic
growth and led to a significant dampening of foreign
investment. Indians, disillusioned with the current
leadership and desperate for change, have given
Narendra Modi a clear mandate.
The key question is whether new Prime Minister,
Modi, can deliver on his pledges and live up to such
high expectations. India’s stock market certainly
thinks so. It’s been sky rocketing during the election
period and hit a new record high of 25,375.63 on
May 16, the day election results were announced.
Modi’s economic track record is undoubtedly
impressive. He’s been chief minister of Gujarat, a
state with 60 million people, for 12 years. During that
time, he’s cut red tape, invested heavily in
infrastructure and contained corruption. Business and
investment have thrived in Gujarat making it an
investment hub for international companies. The state
now produces a quarter of Indian exports although
accounts for just 5% of the nation’s population. Modi
has promised to replicate his Gujarat policies across
the rest of the country.
Our business survey shows that confidence is on the
rise and expectations are running high that the
business environment will improve further. Consumers
are hopeful that the new government will improve
employment conditions and ease price pressures.
Many voters perceive Modi as a magician and problem
solver, while some also give him the status of a god.
Even with a large majority Modi will find his god like
powers restricted. As the head of the central
government, he has power to formulate and execute
economic policies, but he will face limitations in some
states who are more interested in regional rather than
national issues. This is a problem he never had to
face in Gujarat.
Still, to unleash its potential India needs to reform,
and Modi seems like the best choice to challenge the
current status quo. However, only time will tell
whether he can make his style of politics work in a
massively diverse country, often resistant to change.
Shaily Mittal
Economist
MNI Indicators
6. MNI China Consumer Report - May 20136
Consumer sentiment fell in May to the lowest level
since January as consumers were less optimistic
about the future.
Executive Summary
7. MNI India Consumer Report - May 2014 7
Consumer sentiment fell in May to the lowest level
since January as consumers were less optimistic
about the future.
The Consumer Indicator declined to 122.1 in May,
after remaining broadly stable at 125.2 in April.
Consumer confidence fell steadily throughout 2013
as the economy weakened, but gained momentum
towards the end of the year. Even so, it is still nearly
2% below the level seen in May a year ago.
The survey was conducted before the election results
were announced although polls had been clearly
pointing to a win by the BJP.
The Consumer Indicator declined in seven out of the
ten major Indian cities in May apart from Delhi, Pune
and Surat. An improvement in consumer sentiment
made Surat the most optimistic city in May while
respondents from Hyderabad were the least.
Perceptions about the current state of business
deteriorated in May and consumers were less
optimistic about future business conditions compared
with the previous month. The majority of those who
expected business conditions to be better in a year’s
time cited economic development as the main reason.
Many respondents expected business conditions to
improve in the hope that the Modi led government will
push forward with business friendly policies.
The Durable Buying Conditions Indicator increased to
108.6 in May from 106.4 in April, as the majority of
respondents reported that it was a good time or okay
time to purchase large household goods.
Consumers’ dissatisfaction with the current level of
prices increased in May, while expectations for
inflation in a year’s time eased to the lowest since
July 2013.
The Interest Rates Expectations Indicator declined to
the lowest in 10 months after remaining broadly
stable in April, as there were growing expectations
among consumers that the new government will be
successful in easing pressure on prices, a pre-
requisite for an interest rate cut.
The Stock Investment Indicator, which gauges whether
it is a good time to invest in the stock market,
increased significantly to a series high of 120.6 in
May from 110.9 in the previous month, as the
continued rise in the stock market made many
investors better off
MNI India Consumer Indicator - Components
PersonalFinance:
Current
PersonalFinances:
Expected
DurableBuying
Conditions
BusinessConditionsin1
Year
BusinessConditionsin5
Years
0
100
8. MNI India Consumer Report - May 20148
All India - Overview
Mar-14 Apr-14 May-14
Highest
Since
Lowest
Since
3-Month
Average
Monthly
Change
Monthly %
Change
MNI India Consumer Indicator 125.8 125.2 122.1 - Jan-14 124.4 -3.1 -2.4%
Current Indicator 115.5 114.1 114.6 Mar-14 - 114.7 0.5 0.5%
Expectations Indicator 132.8 132.6 127.2 - Jan-14 130.9 -5.4 -4.1%
Personal Finance: Current 119.4 121.8 120.6 - Mar-14 120.6 -1.2 -0.9%
Personal Finance: Expected 133.1 130.2 122.5 - Oct-13 128.6 -7.7 -5.9%
Business Condition: 1 Year 124.5 126.3 122.3 - Jan-14 124.4 -4.0 -3.2%
Business Condition: 5 Years 140.8 141.3 136.8 - Jan-14 139.6 -4.5 -3.2%
Durable Buying Conditions 111.6 106.4 108.6 Mar-14 - 108.9 2.2 2.0%
Current Business Conditions Indicator 102.9 106.3 104.7 - Mar-14 104.6 -1.6 -1.6%
Stock Investment Indicator 89.7 110.9 120.6 series high - 107.1 9.7 8.7%
Real Estate Investment Indicator 117.8 114.4 111.9 - Oct-13 114.7 -2.5 -2.2%
Car Purchase Indicator 75.3 71.7 75.2 Mar-14 - 74.1 3.5 4.9%
Employment Outlook Indicator 115.7 115.7 116.5 Feb-14 - 116.0 0.8 0.8%
Inflation Expectations Indicator 154.2 152.2 146.4 - Jul-13 150.9 -5.8 -3.8%
Current Prices Satisfaction Indicator 67.2 66.3 63.0 - series low 65.5 -3.3 -5.0%
Interest Rates Expectations Indicator 133.0 133.6 130.1 - Jul-13 132.2 -3.5 -2.6%
10. All India - Records
2012-Current
Minimum Maximum Mean Median
MNI India Consumer Indicator 115.9 133.7 123.5 122.9
Current Indicator 109.3 128.3 117.1 115.5
Expectations Indicator 120.3 137.3 127.8 127.2
Personal Finance: Current 114.2 135.4 122.0 121.1
Personal Finance: Expected 118.4 141.5 129.0 130.2
Business Condition: 1 Year 114.1 131.8 121.8 119.7
Business Condition: 5 Years 123.9 141.3 132.7 132.7
Durable Buying Conditions 100.7 121.1 112.2 111.6
Current Business Conditions Indicator 102.9 124.9 114.3 114.5
Stock Investment Indicator 89.7 120.6 103.8 103.7
Investment Return 82.7 139.1 109.8 106.5
Stock Price Sentiment 100.4 128.6 110.5 107.4
Stock Market Expectations 103.8 137.4 116.1 114.3
Real Estate Investment Indicator 109.7 119.9 114.7 114.4
House Price Expectations 133.3 152.6 142.5 142.7
House Buying Sentiment 92.8 121.5 106.8 106.1
House Selling Sentiment 95.5 113.6 106.3 105.4
Car Purchase Indicator 60.1 84.0 72.5 73.0
Car Purchase Expectations 90.3 114.8 103.4 103.2
Price of Gasoline Expectations 142.5 171.0 158.4 158.3
Employment Outlook Indicator 112.0 128.3 119.1 119.1
Inflation Expectations Indicator 126.8 159.2 147.5 152.2
Current Prices Satisfaction Indicator 63.0 115.9 85.3 86.2
Interest Rates Expectations Indicator 116.6 140.4 130.6 131.4
MNI India Consumer Report - May 201410
11. Indian economy
grew by 4.7% in
2013-14, up from
4.5% recorded in
the previous year.
This is the first time in 26 years that growth is below
5% for two successive years.
12. Spitzzeile Titel12
A landslide election victory for Narendra Modi’s
Bharatiya Janata Party has created euphoria in
India, driving the stock market to life-time highs
and the rupee to its strongest level in nine months.
Economic Landscape
13. MNI India Consumer Report - May 2014 13
A landslide election victory for Narendra Modi’s
Bharatiya Janata Party has created euphoria in India,
driving the stock market to life-time highs and the
rupee to its strongest level in nine months. The BJP
has promised to repair the economy and tackle
stubbornly high inflation. Latest economic data from
India has shown modest improvement, with the
current account deficit narrowing due to controls on
gold imports. Both industrial production and
manufacturing output shrank at a slower pace in
March, although remained in negative territory.
Consumer price inflation increased to its highest level
in three months in April. There are increased fears
that a below normal monsoon will put upward
pressure on food prices, making it more challenging
for the Reserve Bank of India to make policy more
accommodative and for the government to kick start
the economy that grew below 5% in 2013-14.
Economic growth remains subdued
Indian economy grew by 4.7% in 2013-14, slightly
above 4.5% growth witnessed a year ago. This is the
first time in 26 years that growth is below 5% for two
successive years.
GDP growth in India slowed to 4.6% on the year in
the three months to March, down from 4.7% in the
previous quarter. It was, though, marginally above the
4.4% rate seen in the same period a year ago.
Data on an output basis showed that growth was
boosted by agriculture which grew 6.3% on the year,
compared with 3.7% in the previous quarter and
1.6% in the same quarter a year earlier. Manufacturing
data was disappointing and remained in contraction,
declining by 1.4% compared with a contraction of
1.5% in the previous quarter, substantially below the
growth of 3% in the same quarter a year earlier. The
service sector (including financing, insurance and real
estate), grew by 12.4%, down from 14.1% in the
previous quarter but up from 11.2% growth seen in
January-March quarter a year ago.
March Industrial output shrinks at slower pace
Economic Growth
0%
2%
4%
6%
8%
10%
12%
Q12009
Q42009
Q32010
Q22011
Q12012
Q42012
Q32013
GDP y/y %, fiscal year
Source: Central Statistical Organisation, India
Industrial production remained in negative territory in
March due to declining manufacturing output,
especially capital goods. Industrial production shrunk
by 0.5% in March following a 1.8% decline in
February.
Much of the decline was led by weakness in
manufacturing output which contracted by 1.2% on
the year following a 3.7% fall in February. Twelve out
of the 22 industry groups within the manufacturing
sector contracted in March, led by a 33.1% fall in
Industrial Production
-10%
-5%
0%
5%
10%
15%
20%
25%
50
100
150
200
250
2007
2008
2009
2010
2011
2012
2013
2014
Industrial Production y/y % (RHS)
Industrial Production
Source: Central Statistical Organisation, India
14. MNI India Consumer Report - May 201414
‘Radio, TV and communication equipment &
apparatus’, followed by 26.1% drop in ‘Office,
accounting and computing machinery’ and 21.5% in
‘Medical, precision & optical instruments, watches
and clocks’.
After increasing 2% on the year in February, mining
output contracted by 0.4% in March. Output of
consumer durables, a measure of consumer demand,
posted the sixteenth consecutive decline, falling
11.8% in March compared with a 9.3% decline in the
previous month. Capital goods output, a proxy for
investment, fell sharply by 12.5% on the year,
compared with a decline of 17.5% in February.
Inflation ticks up
Consumer price inflation rose at the fastest pace in
three months to 8.6% in April compared with 8.3% in
March. The rise was driven by an increase in food
prices. Food price inflation, which makes up almost
half of the basket, increased to 9.8% from 9.2% in
the previous month. Core CPI eased to 7.8% from
7.9% in the previous month.
Wholesale price inflation declined to a two month low
of 5.2% in April from 5.7% in March, helped by a
slowdown in fuel price inflation. However, food prices
continued to rise in April.
In the coming months, there are additional risks of
less-than-normal monsoon rains due to possible El
Niño effects, which could have a negative impact on
India’s agricultural output.
Repo rate unchanged at 8%
The RBI left the key policy rate unchanged at 8% at
its first bi-monthly monetary policy of the financial
year on April 1.
Governor Raghuram Rajan said that the Reserve
Bank’s policy stance will be firmly focused on keeping
the economy on a disinflationary glide path that is
intended to hit 8% inflation by January 2015 and 6%
by January 2016. A central bank panel recently
proposed to revamp its policymaking structure by
setting a long-term consumer price inflation target of
4%, plus or minus 2%. As inflation remains high, it
recommended that the goal should be phased in
gradually.
Rajan has said that if inflation falls as expected,
further policy tightening in the near term is not
anticipated.
The Reserve Bank of India is expected to keep rates
on hold at its June policy meeting as it waits to see
the impact of monsoons on food prices.
Lower fiscal budget deficit
The government budget deficit stood at Rs. 5.08
trillion in 2013-14, or 4.5% of GDP, lower than 4.6 %
projected in the revised estimate, mainly on account
of curbs on government expenditure. Net tax receipts
totalled Rs. 10.15 trillion, below the revised target of
Rs. 10.29 trillion, while total expenditure was Rs.
15.63 trillion, below the target of Rs. 15.9 trillion in
the interim budget.
The government has worked out a fiscal consolidation
plan to bring down the fiscal deficit to 3% of GDP in
2016-17.
0%
2%
4%
6%
8%
10%
12%
Apr-12
Jun-12
Aug-12
Oct-12
Dec-12
Feb-13
Apr-13
Jun-13
Aug-13
Oct-13
Dec-13
Feb-14
Apr-14
Wholesale and Consumer Price Inflation
Wholesale Price Inflation*
Consumer Price Inflation**
Source: *Office of the Economic Advisor, India, **MOSPI
15. MNI India Consumer Report - May 2014 15
Foreign reserves increase
Foreign exchange reserves rose to $313.8 billion in
the week ending May 9, from $311.86 billion a week
earlier as overseas investors poured money into the
stock market. According to the RBI’s weekly statistical
supplement, foreign currency assets, the biggest
component of the forex reserves, rose by $2 billion to
$286.6 billion. These are expressed in dollar terms
and include the effect of appreciation or depreciation
of non-US currencies such as the euro, pound and
yen, held in its reserves.
Moves by the RBI over recent months have greatly
strengthened India’s foreign exchange reserve
position, leaving the country less vulnerable to
another run on the currency. The value of India’s gold
reserves remained unchanged at $21 billion.
Trade deficit shrinks in April
India’s trade deficit narrowed to $10.1 billion in April
compared with $17.7 billion a year ago and a five
month high of $10.5 billion in March.
Exports increased by 5.3% to $25.6 billion in April,
halting two consecutive months in decline. Imports
fell 15% on the year to $35.7 billion in April and were
almost 11% below the $40 billion recorded in March.
Oil imports fell from $15.8 billion in March to $13
billion in April. Gold imports fell significantly by 74.1%
from $2.7 billion in March to $1.8 billion in April. The
Bharatiya Janata Party, which won the majority in
general elections, has promised to ease restrictions
on gold imports, saying these curbs had led to
smuggling. Narendra Modi has said that any action
on gold should take into account the interests of the
public and traders, not just economics and policy.
India’s current account deficit for the January-March
period narrowed sharply to $1.2 billion (0.2% of
GDP) from $18.1 billion (3.6% of GDP) in the same
period last year, which was also lower than $4.2
billion (0.9% of GDP) in the October-December
quarter of 2013-14. The lower current account deficit
was primarily on account of a decline in the trade
deficit as decline in imports was sharper than that in
exports owing to stringent gold curbs. In 2013-14,
current account deficit printed at 1.7% of GDP, much
lower than 4.7% of GDP in the previous year.
Car sales shrink in April
Many car makers have launched compact cars to
attract price sensitive customers and reduced prices
of existing models. In spite of this, car sales decelerated
by 10.2% in April, the second consecutive monthly
decline and the steepest since a 12.3 % fall in May
2013. Many consumers in India have chosen to defer
purchases of vehicles given the slowdown in the
economy, higher loan rates and rising fuel prices.
Potential buyers hope that the next government will
be successful in taming inflation and introduce
friendlier loan policies.
According to the Society of Indian Automobile
Manufacturers’ deputy director general, cuts in excise
taxes and vehicle prices have resulted in an increase
in customer visits to car showrooms but have not
translated into higher purchases. Companies are
looking forward to the new government’s budget to
see if the excise tax cut from 12% to 8% that was
announced in the interim budget in February will be
continued. The automobile industry is optimistic that
sales will increase in 2014 as the economy rebounds
and interest rates and inflation stabilise.
16. MNI China Consumer Report - May 201316
Consumer sentiment fell in May to the lowest level
since January. However, as the new government
assumes power, it has promised to kick-start the
stalling economy and improve general business
conditions.
Indicators
17. MNI India Consumer Report - May 2014 17
Consumer sentiment fell in May to the lowest level
since January as consumers were more pessimistic
about the future.
The Consumer Indicator declined to 122.1 in May
after remaining broadly stable at 125.2 in April.
Consumer confidence fell steadily throughout 2013 as
the economy weakened, but gained momentum
towards the end of the year. Even so, it is still nearly
2% below the level seen in May a year ago.
The survey was conducted before the election results
were announced although polls had been clearly
pointing to a win by the BJP. The new Modi
government has promised to kick-start the stalling
economy and improve general business conditions.
The Current Indicator, which measures consumers’
assessment of current conditions, stood at 114.6
compared with 114.1 in April. The Expectations
Indicator declined to 127.2, after remaining broadly
stable at 132.6 in April.
In May, four out of the five components which make
up the MNI India Consumer Indicator declined. The
only component to rise was the Durable Buying
Conditions Indicator as the majority of consumers
were optimistic about purchasing large household
items. Consumers’ confidence regarding Current
Personal Finances remained broadly stable while a
growing number of respondents expected their Future
Personal Finances to remain the same in a year’s
time.
122.1
MNI India Consumer Indicator
Lowest Since January
MNI India Consumer Indicator
May-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14
MNI India
Consumer Indicator 124.5 123.9 121.2 127.8 125.8 125.2 122.1
Current 120.7 119.0 113.2 118.4 115.5 114.1 114.6
Expectations 127.0 127.2 126.6 134.2 132.8 132.6 127.2
100
110
120
130
140
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
MNI India Consumer Indicator
100
105
110
115
120
125
130
135
140
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Consumer Indicators
Current
Expectations
18. MNI India Consumer Report - May 201418
122.1
114.6
127.2
Total Indicator Current Indicator Expectations Indicator
All India
124.5
119.5
127.9
Total Indicator Current Indicator Expectations Indicator
South India
120.8
112.6
126.2
Total Indicator Current Indicator Expectations Indicator
North India
107.6 107.7 107.5
Total Indicator Current Indicator Expectations Indicator
East India
126.9
114.8
134.9
Total Indicator Current Indicator Expectations Indicator
West India
124.3
117.9
128.6
Total Indicator Current Indicator Expectations Indicator
Central India
19. MNI India Consumer Report - May 2014 19
In spite of the latest fall, the majority of respondents
expected future business conditions to improve.
The less timely quarterly consumer survey from the
Reserve Bank of India showed that consumers’
expectations improved significantly in March
compared with December, in line with our own
survey. Respondents reported lower confidence on
spending and a small proportion of respondents felt it
was a good time for making outlays for big ticket
purchases such as motor vehicles and houses,
consistent with our monthly survey.
Regions
The slight decline in the MNI India Consumer Indicator
was led by South and East India, the latter hitting a
record low. Expectations of respondents from East
India about future Personal Finances and Business
Conditions in a year’s time fell to a series low.
Respondents from West India were the most
optimistic, led by a significant increase in Durable
Buying Conditions Indicator.
Consumers remained more optimistic about future
rather than current conditions. It was only in East
India, where consumers were almost equally optimistic
about current conditions and future expectations.
Age
Consumer sentiment deteriorated in all age groups,
and was the lowest in the oldest age group.
The Consumer Indicator for the 18-34 age range
declined to 126.6 in May from 128.1 in April. All five
components of the Consumer Indicator declined apart
from Durable Buying Conditions which remained
broadly stable. In spite of a decline, consumers
remained highly optimistic about their Personal
Finances, both current and expected, while their
perceptions about future Business Conditions
remained at elevated levels.
-0.2
-1.2
-0.6
-0.7
0.3
Personal Finance: Current
Personal Finance: Expected
Business Condition: 1 Year
Business Condition: 5 Year
Durable Buying Conditions
Consumer Indicator: Contribution to Monthly Change
(% pt.)
20. MNI India Consumer Report - May 201420
Consumer sentiment among 35-54 year olds declined
to 120.5 in May from 123.6 in April, the lowest since
September 2013. The decline in sentiment was led by
the Expectations Indicator, with all three of its
components down on the month. Consumers were
more optimistic about Current Personal Finances and
buying large household items.
For the oldest age range, 55-64 year olds, sentiment
declined to the lowest since January to 118.2 in May
compared with 119.7 in the previous month. The
decline was led by the Expectations Indicator which
fell to the lowest since December 2013. Expected
Personal Finances and Business Conditions in One
Year, both fell to the lowest since October, while
consumers were more optimistic about Business
Conditions in Five Years. After a significant fall in
April, consumers’ confidence to buy large household
goods increased in May despite lower Current
Personal Finances compared with the previous
month.
Income
Confidence deteriorated in high income households
and remained broadly stable among low income
households.
The Consumer Indicator for households with an
average annual income of over INR 432,000 declined
2.1% on the month to 130.6 from a series high of
133.4 in April. For households with an average
annual income under INR 432,000, the indicator
remained broadly stable at 123.2 compared with
124.3 in April.
Compared with the previous year, confidence has
increased 2.6% among higher income households,
while for lower income households it has declined by
1%. On average, though, the level of confidence
remains greater for high income households.
122.1
126.6
120.5
118.2
Total Indicator 18-34 35-54 55-64
Consumer Indicator: Age Groups
21. MNI India Consumer Report - May 2014 21
123.2
118.1
126.6
Total Indicator Current Indicator Expectations Indicator
< INR 432,000 per annum
130.6
120.8
137.2
Total Indicator Current Indicator Expectations Indicator
> INR 432,000 per annum
MNI India Consumer Indicator
Income Groups
22. MNI India Consumer Report - May 201422
MNI India Consumer Indicator
Main Cities
The Consumer Indicator declined in seven out of the
ten major Indian cities in May, apart from Delhi, Pune
and Surat. An improvement in consumer sentiment
made Surat the most optimistic city in May, while re-
spondents from Hyderabad were the least.
In the capital Delhi, consumer sentiment increased for
the first time in four months to 120.8 in May from
116.3 in the previous month. All five components that
make up the Consumer Indicator rose, with consu-
mers being the most optimistic about purchasing a
large household good. Respondents’ expectations
about Business Conditions in One Year hit a series
high and were also optimistic about Business Condi-
tions in Five Years, which rose for the first time in four
months. Personal Finances, both current and ex-
pected, also contributed to a brighter consumer confi-
dence.
In Mumbai, India‘s most populous city, consumer
sentiment declined slightly to 128.0 from 129.6 in
April. Consumers were less optimistic about Business
Conditions in a year’s time, although there was a rise
in confidence regarding longer term expectations
about business conditions. There was a small rise in
consumers’ Personal Finances, both current and ex-
pected, although fewer thought it was a good time to
purchase large household items with the Durable Bu-
ying Conditions Indicator dropped to the 100 mark,
the lowest since September 2013.
Consumer confidence in Bengaluru, the third largest
city by population in India, declined following sharp
movements over the past five months. The Consumer
Indicator fell to 131.8 from 138.0 in April, led by a
significant decline in the Expectations Indicator. Sen-
timent towards the purchase of household goods im-
proved, while the rest of the components that make
up the Consumer Indicator declined.
100
105
110
115
120
125
130
135
140
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Consumer Indicator - Mumbai
110.0
140.0
120.0
140.0
130.0
150.0
100.0
Current
Indicator
Expectations
Indicator
Personal
Finances:
Current
Personal
Finances:
Expected
Business
Conditions: 1
Year
Business
Conditions: 5
Year
Durable
Buying
Conditions
Consumer Indicator Components - Mumbai
In May, consumer sentiment rose the most in Surat,
driven by the expectations during the survey period
that Narendra Modi would win the elections. The Con-
sumer Indicator increased from 131.0 in April from
138.0 in May and was 14.5% above the same period
a year earlier.
23. MNI India Consumer Report - May 2014 23
100
105
110
115
120
125
130
Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14
Consumer Indicator - Delhi
80
90
100
110
120
130
140
150
160
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Consumer Indicator - Bangaluru
108.2
129.2
109.6
129.8
134.6
123.1
106.7
Current
Indicator
Expectations
Indicator
Personal
Finances:
Current
Personal
Finances:
Expected
Business
Conditions: 1
Year
Business
Conditions: 5
Year
Durable
Buying
Conditions
Consumer Indicator Components - Delhi
125.5
136.0 140.0
121.0
131.0
156.0
111.0
Current
Indicator
Expectations
Indicator
Personal
Finances:
Current
Personal
Finances:
Expected
Business
Conditions: 1
Year
Business
Conditions: 5
Year
Durable
Buying
Conditions
Consumer Indicator Components - Bangaluru
24. MNI India Consumer Report - May 201424
Consumers’ confidence regarding their Current
Personal Finances remained broadly stable, while a
growing number of respondents reported that they
expected their Future Personal Finances to be the
same in a year’s time.
Current Personal Finances, which measures whether
the financial situation of a household is better, the
same or worse than a year ago, stood at 120.6
compared with 121.8 in April. Current Personal
Finances hit a series low in July 2013, but have
subsequently recovered.
The majority of respondents reported that their current
financial situation remained the same compared with
a year ago, and about 44% reported that their financial
conditions were better.
Out of those who responded that their financial
conditions improved, the majority cited better income
as the main reason. A growing proportion gave credit
to better family expenses for healthier finances.
Expected Personal Finances, which measures whether
households think their finances will be better in a
year’s time, declined for the third month in a row to
122.5 from 130.2 in April. The percentage of
respondents reporting that they expected their
financial situation to improve in a year’s time fell from
55.2% to 45.5%. The percentage of respondents
reporting that they expected their financial situation to
remain the same in a year’s time increased to 48.6%
from 40.3% previously.
120.6
Personal Finances
Expected Finances Lowest Since
October 2013
Personal Finances
May-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14
Current 122.2 122.5 120.5 125.3 119.4 121.8 120.6
Expectations 131.0 131.0 127.8 137.4 133.1 130.2 122.5
100
110
120
130
140
150
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Personal Finances
Current
Expectations
6.3%
37.2%
47.9%
8.4%
0.1%
Current Financial Situation Compared with 1 Year
Ago (% of Households)
Much Better
A Little Better
Same
A Little Worse
Don‘t know/ No Answer
Much Worse
25. MNI India Consumer Report - May 2014 25
0.4%
2.0%
15.8%
81.8%
Monthly Household Income Used for Daily Expenses
(% of Households)
38.4%
40.7%
14.6%
6.3%
Monthly Household Income Used for Savings
(% of Households)
90.3%
7.2%
2.3%
0.2%
Monthly Household Income Used for Large Loan
Repayment (% of Households)
94.2%
5.4%
0.4%
Monthly Household Income Used for Investments
(% of Households)
How Households Spend their
Money
0% - 29% of Income
30% - 49% of Income
0% of Income
1% - 29% of Income
0% of Income
1% - 29% of Income
0% of Income
1% - 29% of Income
50% - 69% of Income
70% - 100% of Income
30% - 49% of Income
50% - 100% of Income
30% - 49% of Income
50% - 100% of Income
30% -49% of Income
50% - 100% of Income
26. w
Economic
development of the
country should
improve business
conditions.
There was hope among respondents that the Modi
led government will push forward with business
friendly policies.
27. MNI India Consumer Report - May 2014 27
Perceptions about the current state of business
deteriorated in May and consumers were less
optimistic about future business conditions compared
with the previous month.
The Current Business Conditions Indicator, which
measures respondents’ views on the state of business
compared with a year earlier, declined slightly to
104.7 in May from 106.3 in the previous month.
Current business sentiment has declined considerably
since the survey started in November 2012, and was
13.5% below the same period a year ago.
The proportion of respondents who were positive
about business conditions fell from almost 30% to
26%, while the proportion of those who found them
“just fair” increased to 54.2% from 48.6% previously.
Respondents who said business conditions were
“poor” or “very poor” remained in minority at 15.5%.
Expectations for Business Conditions in a Year stood
at 122.3 in May compared with 126.3 in April. Inspite
of the fall, the majority of respondents expected
business conditions to be better in a year’s time.
The majority of those who expected business
conditions to be better in a year cited economic
development as the main reason. Many respondents
expected business conditions to improve in the hope
that the Modi led government will push forward with
business friendly policies.
104.7
Business Conditions
Future Expectations Lowest
Since January
Business Conditions
May-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14
Current 121.0 114.5 108.9 116.0 102.9 106.3 104.7
In 1 Year 119.4 117.4 119.3 128.2 124.5 126.3 122.3
In 5 Years 130.5 133.1 132.7 136.9 140.8 141.3 136.8
40
50
60
70
80
90
100
110
120
130
140
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Current Business Conditions Indicator
90
100
110
120
130
140
150
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Expected Business Conditions: 1 Year and 5 Years
1 Year
5 Years
28. MNI India Consumer Report - May 201428
Business Conditions in 1 Year
Selected Reasons
Government/Policy
Econ. Development
Income/Employment
Resource/Environment
Social Stability/ Security
Events
Government/Policy
Econ. Development
Income/Employment
Resource/Environment
Social Stability/ Security
Events
27.3%
46.2%
15.1%
7.3%
3.0%
1.0%
All India, Reasons for Better
39.4%
31.3%
13.2%
7.4%
8.8%
All India, Reasons for Worse
68.8% 67.7%
31.2% 32.3%
Apr-14 May-14
All India
Longer term, Expectations for Business Conditions in
Five Years have been on an upward trend since July
last year and the decline in May marked the first fall
in four months. The indicator declined from April’s
series high of 141.3 to 136.8 in May. Among the
major cities surveyed, Surat, which is a large trading
centre in Gujarat, was the most optimistic city.
Mumbai, the financial capital of India, witnessed the
largest jump in long term expectations as compared
with the previous month.
Better
Worse
29. MNI India Consumer Report - May 2014 29
Business Conditions in 1 Year
Regions
122.3 126.6
118.9
94.2
131.7 126.8
All India North
India
South
India
East
India
West
India
Central
India
Business Expectations
North India South India East India West India Central India
Reasons for Better (% of Respondents)
58.3%
68.4% 69.6% 72.7% 69.2%
41.7%
31.6% 30.4% 27.3% 30.8%
North India South India East India West India Central India
Business Expectations: Better or Worse?
(% of Respondents)
North India South India East India West India Central India
Reasons for Worse (% of Respondents)
Better
Worse
Government/Policy
Econ. Development
Income/Employment
Resource/Environment
Social Stability/ Security
Events
Government/Policy
Econ. Development
Income/Employment
Resource/Environment
Social Stability/ Security
Events
30. MNI India Consumer Report - May 201430
The Durable Buying Conditions Indicator increased to
108.6 in May from 106.4 in April, as the majority of
respondents reported that it was a good time or okay
time to purchase large household goods.
Sentiment on buying conditions fell throughout most
of last year, highlighting pressure on consumers’
disposable income, owing to the weakening of the
economy and high inflation. The ground lost in 2013
has still not been regained, with the result in May
down almost 9% from the same period a year earlier.
Out of the ten largest cities surveyed, respondents
from Kolkata were the most optimistic about buying a
large household item in May. Compared with the
previous month, fewer consumers from Mumbai,
Ahmadabad and Chennai thought it was a good time
to buy a large household item.
The rise in the Durable Buying Conditions Indicator
was led by North and West India. Respondents from
South India were the most optimistic about buying
durable goods, although fewer respondents as
compared with the previous month.
Durable Buying Conditions
Highest Since March
Durable Buying Conditions
May-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14
Durable Buying
Conditions 119.2 115.5 106.0 111.4 111.6 106.4 108.6
108.6
95
100
105
110
115
120
125
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Durable Buying Conditions
0.8%
35.7%
36.7%
18.0%
1.1%
7.7%
Is It a Good or Bad Time to Buy Large Household
Goods? (% of Households)
Excellent Time
Good Time
Neutral
Bad Time
Very Bad Time
Don‘t Know/No Answer
31. MNI India Consumer Report - May 2014 31
The Employment Outlook Indicator increased slightly
to 116.5 in May from 115.7 in April.
The indicator measures opinion on the outlook for the
employment market over the next 12 months. The
Modi government has promised better employment
generation especially for the youth.
The May reading was below the series average of
119.1 and almost 9% below the same period a year
ago.
Respondents from North and West India expected an
improvement in the employment situation over the
next 12 months while those from other regions were
less optimistic about the employment outlook. In East
India, the indicator fell below the 100 expansion/
contraction level as the number of optimistic
respondents reduced significantly.
The proportion of respondents who expected an
improvement in the Employment Outlook increased to
42.1% in May while 48.4% expected them to remain
the same. Those expecting the employment outlook to
worsen declined from 12% to 9.5% in May.
Employment Outlook Indicator
Highest Since February
Employment Outlook
May-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14
Employment
Outlook 127.9 117.6 112.0 121.8 115.7 115.7 116.5
100
105
110
115
120
125
130
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Employment Outlook Indicator
1.3%
40.8%
48.4%
8.7%
0.8%
Employment Outlook for the Next 12 Months
(% of Households)
116.5
Much Better
A Little Better
Same
A Little Worse
Much Worse
Don‘t Know/No Answer
32. w
Expectations for
inflation in a year’s
time eased to the
lowest since July
2013.
A higher proportion of respondents thought prices
would remain the same, but of those who thought
prices would go up, a growing proportion thought
that they would rise up to 10%.
33. MNI India Consumer Report - May 2014 33
Consumers’ dissatisfaction with the current level of
prices increased in May, while expectations for
inflation in a year’s time eased to the lowest since July
2013.
The Current Prices Satisfaction Indicator declined to a
new series low of 63.0 in May compared with 66.3 in
the previous month. A figure below 100 indicates
wider dissatisfaction with the current level of prices.
The further below 100, the greater the dissatisfaction.
The indicator has trended down since the start of the
survey in November 2012 and has been above 100 in
only the first two months of the survey.
India’s consumer price inflation rose at the fastest
pace in three months to 8.6% in April compared with
8.3% in March. Food price inflation, which makes up
almost half of the basket, increased to 9.8% from
9.2% in the previous month. Wholesale price inflation
declined to a two month low of 5.2% in April from
5.7% in March, helped by a slowdown in fuel price
inflation.
The Inflation Expectations Indicator, which measures
whether respondents think prices will be higher or
lower in 12 months’ time, declined for the third
consecutive month to 146.4 from 152.2 in April.
Consumers’ expectations for inflation have remained
elevated since November 2012 when the series
started. Some respondents expected the new
government to help bring down price pressures.
The percentage of respondents who believed prices
would be higher in a year’s time fell from 82.5% to
Prices Sentiment
Inflation Expectations Lowest
Since July 2013
Prices Sentiment
May-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14
Satisfaction with
Current Prices 99.7 86.2 75.7 75.4 67.2 66.3 63.0
Inflation Expec-
tations 136.5 152.6 153.6 154.8 154.2 152.2 146.4
60
70
80
90
100
110
120
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Satisfaction with Current Prices Indicator
110
120
130
140
150
160
170
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Inflation Expectations Indicator
63.0
34. MNI India Consumer Report - May 201434
0.8%
13.8%
16.4%
48.5%
20.5%
Satisfaction with Current Prices
(% of Households)
Very Satisfied
Quite Satisfied
So So
Not Very Satisfied
Not Satisfied At All
Don‘t Know/No Answer
22.2%
53.1%
19.8%
4.7%
0.2%
Inflation Expectations in 12 Months
(% of Households)
Much Higher
A Little Higher
Same
A Little Lower
Much Lower
Don‘t Know/No Answer
75.3%, while those saying prices would be about the
same increased to 19.8% from 12.4% in the previous
month. A tiny proportion of respondents believed
prices would be lower in a year’s time.
A higher proportion of respondents thought prices
would remain the same, but of those who thought
prices would go up, a growing proportion thought that
prices would rise by up to 10%.
Regions
Satisfaction with Current Prices worsened significantly
in East and West India, the latter hitting a series low.
North Indian respondents were the least satisfied with
almost three quarters of them saying they were
dissatisfied.
Apart from Central and North India, more respondents
from the other three regions expected prices to fall in
a year’s time as compared with the previous month.
Consumers from the Central region had the highest
inflationary expectations since the start of the series
in April 2013 and also as compared with the other
regions.
Prices Sentiment
Regions
35. MNI India Consumer Report - May 2014 35
63.0
54.4
71.3
62.4 63.1
66.1
All India North
India
South
India
East
India
West
India
Central
India
Current Prices Satisfaction Indicator
146.4
156.1
143.4
122.4
148.4
159.8
All India North
India
South
India
East
India
West
India
Central
India
Inflation Expectations Indicator
All India North
India
South
India
East
India
West
India
Central
India
Satisfaction with Current Prices
(% of Households)
Very Satisfied
Quite Satisfied
Neutral
Not Very Satisfied
Not Satisfied At All
Don‘t Know/No Answer
North
India
South
India
East
India
West
India
Central
India
Inflation Expectations in 12 Months
(% of Households)
Much Higher
A Little Higher
Same
A Little Lower
Much Lower
Don‘t Know/No Answer
36. MNI India Consumer Report - May 201436
The Interest Rates Expectations Indicator declined to
the lowest in 10 months after remaining broadly
stable in April, as there were growing expectations
among consumers that the new government will be
successful in easing pressure on prices, a pre-
requisite for an interest rate cut.
The indicator declined to 130.1 in May from 133.6 in
April, although was 3.6% above the outturn recorded
in the same period a year ago. Since September 2013,
when Raghuram Rajan took over as the Governor of
the RBI, interest rates have been hiked three times in
order to stabilise the sharp fall of the rupee and control
inflation.
The RBI left the key policy rate unchanged at 8% at
its first bi-monthly monetary policy of the financial
year on April 1. Raghuram Rajan said that the Reserve
Bank’s policy stance will be firmly focused on keeping
the economy on a disinflationary glide path and is
confident inflation will hit 8% by January 2015 and
6% by January 2016.
Interest Rate Expectations
Lowest Since July 2013
Interest Rate Expectations
May-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14
Interest Rate
Expectations 125.6 140.4 136.3 134.6 133.0 133.6 130.1
130.1
100
110
120
130
140
150
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Interest Rate Expectations Indicator
11.6%
41.9%
23.8%
4.0%
0.4%
18.3%
Expected Change in Interest Rate in 1 Year
(% of Households)
Much Higher
A Little Higher
Same
A Little Lower
Much Lower
Don‘t know/ No Answer
37. MNI India Consumer Report - May 2014 37
The Stock Investment Indicator, which gauges whether
it is a good time to invest in the stock market,
increased significantly to a series high of 120.6 in
May from 110.9 in the previous month, as the
continued rise in the stock market made many
investors better off.
Indian equities have rallied in recent months boosted
by a growing expectation that the new government
will help to improve economic growth. The benchmark
Sensex hit another all-time high of 25375.63 on May
16 as BJP got a clear mandate in the general elections.
The Indicator is made up of three components;
Investment Return, Stock Price Sentiment and Stock
Market Expectations. Stock Price Sentiment, which
measures whether respondents view equity prices as
high or low and affects investment negatively, declined
for the second time in a row to 112.8 from 119.3 in
April.
The Stock Investment Return component increased
sharply to 139.1 in May from 114.6 in April. The
proportion of respondents who made a loss in the last
year reduced drastically to just 5.4% from 25.7% in
April and 50.1% in March while those who made a
profit increased to 66.5% from 53.7% in April.
Expectations for the stock market in three months’
time declined for the first time in four months to 135.5
in May from 137.4 in April, as the majority of
respondents expected equity prices to go up.
Stock Investment Indicator
Hits Series High
Investment Sentiment
May-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14
Investment
Sentiment Indicator 101.4 102.3 102.3 105.1 89.7 110.9 120.6
Investment Return 104.0 100.5 103.0 104.5 82.7 114.6 139.1
Stock Price
Sentiment 103.5 105.8 107.4 103.7 128.6 119.3 112.8
Stock Market
Expectation 103.8 112.1 111.1 114.3 114.9 137.4 135.5
70
80
90
100
110
120
130
Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Stock Investment Indicator
7.36
1.94
-0.57
Investment Return
Stock Price Sentiment
Stock Market Expectations
Stock Investment Indicator: Contribution to Monthly
Change (% pt.)
120.6
39. The Stock
Investment Indicator
rose to a series high
in May.
Both foreign and local investors have been investing
in stocks in the hope that new government’s reforms
will revive the Indian economy.
40. w
The Real Estate
Investment Indicator
declined for the third
consecutive month
in May.
However, consumers remained optimistic and
expected a reduction in home loans.
41. MNI India Consumer Report - May 2014 41
The Real Estate Investment Indicator, which gauges
whether it is a good time to invest in the housing
market, declined for the third consecutive month in
May having risen close to the series high in February.
The indicator fell to 111.9 in May from 114.4 in April.
The three month trend has followed a sharp V-curve
and May’s dip marked the first fall in seven months.
The Real Estate Investment Indicator is composed of
three sub-indicators to gauge sentiment on the
housing market; House Price Expectations, House
Buying Sentiment and House Selling Sentiment.
House Buying Sentiment picked up slightly in May to
103.2 from 102.1 in April, following two consecutive
declines. 35.8% of the respondents said it was an
excellent or a good time to buy a house.
Modi has promised to implement an affordable
housing policy. Consumers are optimistic and expect
a reduction in home loans, the implementation of the
proposed GST framework and its implied tax benefits.
Since May 2013, increasingly more consumers have
expected prices to rise in the next six months. After
hitting a series high in February, the House Price
Expectations component has eased, and in May it
stood at 139.8, down from 145.9 in April. The
proportion of respondents who thought house prices
would rise in the next six months declined from 71.4%
in April to 63.1% in May.
Real Estate Investment Indicator
Third Consecutive Decline
Real Estate Investment Sentiment
May-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14
Real Estate Invest-
ment Sentiment 113.1 114.4 114.2 119.1 117.8 114.4 111.9
Price Expectations 133.3 143.8 143.1 152.6 148.6 145.9 139.8
House Buying 115.5 104.8 94.9 107.7 102.8 102.1 103.2
House Selling 109.4 105.4 95.5 102.9 98.2 104.9 107.3
111.9
100
105
110
115
120
125
Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Real Estate Investment Indicator
-1.79
0.32
-0.70
Price Expectations
House Buying Sentiment
House Selling Sentiment
Real Estate Investment Indicator: Contribution to
Monthly Change (% pt.)
42. MNI India Consumer Report - May 201442
110
120
130
140
150
160
Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Real Estate Prices: Expected Changes in Next 6
Months
114.4
102.1 104.9
145.9
111.9
103.2 107.3
139.8
Real Estate
Investment
Indicator
House Buying
Sentiment
House Selling
Sentiment
House Price
Expectations
Real Estate Investment Indicator - Components
All India North
India
South
India
East
India
West
India
Central
India
Expected Changes in Real Estate Prices in the Next
6 months (% of Households)
Real Estate Investment Indicator
Components and Balances
The House Selling Sentiment component, which has
a negative impact on the Real Estate Investment
Indicator, increased for the second time in a row to
107.3 in May from 104.9 in the previous month.
Regions
The Real Estate Investment Indicator fell in all regions
apart from South India where a rise in House Buying
Sentiment led the rise. Respondents in the other
regions (North, East, West and Central India) were
less optimistic about real estate investment.
April 2014
May 2014
Go Up Dramatically
Go Up Slightly
Stay the Same
Gow Down Slightly
Go Down Sharply
Don‘t Know/No Answer
43. MNI India Consumer Report - May 2014 43
80
90
100
110
120
130
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
House Buying Sentiment
90
95
100
105
110
115
120
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
House Selling Sentiment
47.4%
27.3%
13.2%
4.6%
3.9%
3.7%
Reasons for Buying Houses (% of Households)
1.9%
32.1%
36.7%
17.1%
2.1%
9.9%
Timing for Selling Houses (% of Households)
Excellent Time
Good Time
Neutral
Bad Time
Very Bad Time
Don‘t Know/No Answer
Prices
Income/Purchasing Power
Investment Value
Policy/Interest Rate
Supply and Quality
Others
44. MNI India Consumer Report - May 201444
The Car Purchase Indicator rose in May as consumers’
expectations for gasoline prices declined to the lowest
in 15 months, while their perceptions about the timing
for buying a car remained broadly stable. The
indicator rose to 75.2 in May from 71.7 in April.
Many car makers have reduced prices of existing
models and launched compact cars to attract price
sensitive customers. In spite of this, car sales
decelerated by 10.2% in April, according to the
Society of Indian Automobile Manufacturers.
Consumers have chosen to defer purchases of vehicles
given the slowdown in the economy, higher loan rates
and rising fuel prices. Potential buyers hope that the
new government will be successful in taming inflation
and introduce friendlier loan policies.
The Car Purchase Expectations component, which
gauges whether consumers believe it is a good or bad
time to purchase a car over the next 12 months,
remained broadly stable after declining to an eight
month low in April. The component stood at 101.8 in
May compared with 102.3 in April.
Of those who thought it would be a good time to buy
a car, the majority continued to cite higher purchasing
power as the main reason, although a growing
proportion thought it would be a good investment
value.
The Indicator on Gasoline Prices, which measures
expectations for the price of gasoline in a year,
declined to the lowest since February 2013, to 151.4
in May compared with 158.8 in April.
Car Purchase Indicator
Lower Expectations for Gasoline
Prices
50
60
70
80
90
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Car Purchase Indicator
80
90
100
110
120
130
140
150
160
170
180
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Car Purchase Indicator - Components
Car Purchase Expectations
Price of Gasoline
Car Purchase Sentiment
May-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14
Car Purchase
Sentiment 75.8 73.8 69.2 73.0 75.3 71.7 75.2
Car Purchase
Expectations 106.0 103.0 99.0 103.2 108.9 102.3 101.8
Price of Gasoline 154.5 155.4 160.6 157.2 158.3 158.8 151.4
75.2
45. MNI India Consumer Report - May 2014 45
Car Purchase Indicator
Regions
101.8
107.4
100.3
72.8
110.9
98.2
All India North
India
South
India
East
India
West
India
Central
India
Car Purchase Expectations - Regions
All India North
India
South
India
East
India
West
India
Central
India
Reasons for a Bad Time to Buy a Car
(% of Households)
Prices
Income/Purchasing Power
Policy/Interest Rate
Supply and Quality
Cost of Use/Upkeep
Others
Reasons for a Good Time to Buy a Car
(% of Households)
All India North
India
South
India
East
India
West
India
Central
India
Prices
Income/Purchasing Power
Policy/Interest Rate
Supply and Quality
Cost of Use/Upkeep
Others
0.5%
28.0%
32.1%
22.2%
1.5%
15.8%
Is it a Good Time to Buy a Car?
(% of Households)
Excellent
Good Time
Neutral
Bad Time
Very Bad Time
Don‘t Know/No Answer
46. MNI India Consumer Report - May 201446
MNI India Consumer Indicator
Regions
112.6
126.2
118.7
126.5 126.6
125.4
106.5
Current
Indicator
Expectations
Indicator
Personal
Finances:
Current
Personal
Finances:
Expected
Business
Conditions: 1
Year
Business
Conditions: 5
Years
Durable
Buying
Conditions
Consumer Indicator Components: North India
90
100
110
120
130
140
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Consumer Indicator: North India
119.5
127.9 124.6
116.9 118.9
147.8
114.3
Current
Indicator
Expectations
Indicator
Personal
Finances:
Current
Personal
Finances:
Expected
Business
Conditions: 1
Year
Business
Conditions: 5
Years
Durable
Buying
Conditions
Consumer Indicator Components: South India
110
115
120
125
130
135
140
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Consumer Indicator: South India
47. MNI India Consumer Report - May 2014 47
107.7 107.5 108.7 108.1
94.2
120.2
106.7
Current
Indicator
Expectations
Indicator
Personal
Finances:
Current
Personal
Finances:
Expected
Business
Conditions: 1
Year
Business
Conditions: 5
Years
Durable
Buying
Conditions
Consumer Indicator Components: East India
100
110
120
130
140
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Consumer Indicator: East India
114.8
134.9
122.3
130.3 131.7
142.9
107.4
Current
Indicator
Expectations
Indicator
Personal
Finances:
Current
Personal
Finances:
Expected
Business
Conditions: 1
Year
Business
Conditions: 5
Years
Durable
Buying
Conditions
Consumer Indicator Components: West India
90
100
110
120
130
140
150
Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14
Consumer Indicator: West India
48. MNI India Consumer Report - May 201448
North India South India East India West India Central India
Employment Outlook for the Next 12 Months
(% of Households)
North
India
South
India
East
India
West
India
Central
India
Interest Rate Expectations on House and Car Loans
Indicator
Much Better
A Little Better
About the Same
A Little Worse
Much Worse
Don‘t Know/No Answer
117.9
128.6 130.4
115.2
126.8
143.8
105.4
Current
Indicator
Expectations
Indicator
Personal
Finances:
Current
Personal
Finances:
Expected
Business
Conditions: 1
Year
Business
Conditions: 5
Years
Durable
Buying
Conditions
Consumer Indicator Components: Central India
110
115
120
125
130
135
Jun-13 Sep-13 Dec-13 Mar-14
Consumer Indicator: Central India
49. MNI India Consumer Report - May 2014 49
All India North India South India East India West India Central India
Is it a Good/Bad Time to Buy Large Household Goods? (% of Households)
130.1 133.6
128.6
113.5
132.3
146.4
All India North
India
South
India
East
India
West
India
Central
India
Interest Rates Expectations
(% of Households)
75.2 73.4
82.3
64.4
77.0
68.8
All India North
India
South
India
East
India
West
India
Central
India
Car Purchase Indicator - Regions
Much Higher
A Little HIgher
About the Same
A Little Lower
Much Lower
Don‘t Know/No Answer
Excellent Time
Good Time
Neutral
Bad Time
Very Bad Time
Don‘t Know/No Answer
50. MNI India Consumer Report - May 201450
MNI India Consumer Indicator
Income Groups
121.7 120.5 115.6
143.6
114.6
Personal
Finances:
Current
Personal
Finances:
Expected
Business
Conditions: 1
Year
Business
Conditions: 5
Years
Durable
Buying
Conditions
< INR 432,000 - Components
124.3
116.1
129.8
123.2
118.1
126.6
Total Indicator Current Indicator Expectations Indicator
< INR 432,000 per annum
132.9 134.4 132.2
145.0
108.6
Personal
Finances:
Current
Personal
Finances:
Expected
Business
Conditions: 1
Year
Business
Conditions: 5
Years
Durable
Buying
Conditions
> INR 432,000 - Components
133.4
120.8
141.8
130.6
120.8
137.2
Total Indicator Current Indicator Expectations Indicator
> INR 432,000 per annum
April 2014
May 2014
April 2014
May 2014
51. Confidence
deteriorated in high
income households
in May.
On average, though, the level of confidence remains
greater for high income households as compared
with low income households.
52. Spitzzeile Titel52
A selection of comments from the panel of
consumers surveyed over the past month.
What the Panel Said
53. “In Surat, the property rates are high but in nearby
areas they are less.”
“Business conditions will improve only if new
government encourages upcoming entrepreneurs.”
“There are a lot of new shops due to competition so a
customer can purchase goods at reseaonable price.”
“Taxes on electronic goods has been reduced.”
“Public in Gujarat are enthusiastic. Investments here
are comparatively more compared with other states.”
“It is not a good time to buy consumer durables and
people should wait until the festival season.”
“There is a variety of cars in market, so it‘ll be good
time for people to buy a car.”
“Economic conditions will be better if Modi government
comes in power.”
“Gasoline prices depend upon the international
market, rupee dollar fluctuations & crude prices.”
“To own a car is considered as a status symbol.”
“It is better to buy consumer durables online.”
“It is best to buy households goods during Diwali time
because large discounts are available.”
“Building material cost is very high so prices of houses
will go up.”
“There is no resale value for electronic items.”
“Because of the poor conditions of business and
employment in Muzzafarnagar, it‘ll be bad time for people
to buy a house here.”
“If Narendra Modi govt comes to power, things will
improve.”
“Nowadays everybody carries a mobile phone as buying
capacity has increased.”
“There is a hope that if Modi government comes to
power, prices will be reduced.”
“Employment conditions are poor.”
MNI India Consumer Report - May 2014 53
54. w
Economic conditions
will be better if Modi
government comes
to power...
...a general belief among many respondents.
55. Spitzzeile Titel 55
A closer look at the data from the May consumer
survey.
Data Tables
56. MNI India Consumer Report - May 201456
North India Overview
Mar-14 Apr-14 May-14
Highest
Since
Lowest
Since
3-Month
Average
Monthly
Change
Monthly %
Change
NorthI India Consumer Indicator 125.1 119.3 120.8 Mar-14 - 121.7 1.5 1.2%
Current Indicator 112.8 108.0 112.6 Mar-14 - 111.1 4.6 4.3%
Expectations Indicator 133.3 126.8 126.2 - Jan-14 128.8 -0.6 -0.5%
Personal Finance: Current 115.3 114.8 118.7 Feb-14 - 116.3 3.9 3.4%
Personal Finance: Expected 142.4 130.3 126.5 - Dec-13 133.1 -3.8 -2.9%
Business Condition: 1 Year 127.4 121.8 126.6 Mar-14 - 125.3 4.8 4.0%
Business Condition: 5 Years 130.0 128.4 125.4 - Jan-14 127.9 -3.0 -2.3%
Durable Buying Conditions 110.4 101.2 106.5 Mar-14 - 106.0 5.3 5.2%
Current Business Conditions Indicator 90.5 95.5 93.0 - Mar-14 93.0 -2.5 -2.6%
Stock Investment Indicator 77.1 106.4 122.2 series high - 101.9 15.8 14.8%
Real Estate Investment Indicator 116.8 111.7 110.0 - Jan-14 112.8 -1.7 -1.5%
Car Purchase Indicator 69.8 71.8 73.4 Feb-14 - 71.7 1.6 2.2%
Employment Outlook Indicator 103.9 103.9 105.6 Feb-14 - 104.5 1.7 1.6%
Inflation Expectations Indicator 158.3 148.9 156.1 Mar-14 - 154.4 7.2 4.9%
Current Prices Satisfaction Indicator 60.8 54.9 54.4 - series low 56.7 -0.5 -0.8%
Interest Rates Expectations Indicator 133.3 130.8 133.6 Dec-13 - 132.6 2.8 2.1%
57. MNI India Consumer Report - May 2014 57
South India Overview
Mar-14 Apr-14 May-14
Highest
Since
Lowest
Since
3-Month
Average
Monthly
Change
Monthly %
Change
South India Consumer Indicator 123.4 129.5 124.5 - Mar-14 125.8 -5.0 -3.8%
Current Indicator 120.0 123.7 119.5 - Jan-14 121.1 -4.2 -3.4%
Expectations Indicator 125.7 133.4 127.9 - Mar-14 129.0 -5.5 -4.1%
Personal Finance: Current 124.5 131.8 124.6 - Mar-14 127.0 -7.2 -5.5%
Personal Finance: Expected 114.6 121.9 116.9 - Mar-14 117.8 -5.0 -4.1%
Business Condition: 1 Year 110.9 121.5 118.9 - Mar-14 117.1 -2.6 -2.1%
Business Condition: 5 Years 151.4 156.7 147.8 - Feb-14 152.0 -8.9 -5.7%
Durable Buying Conditions 115.5 115.5 114.3 - Jan-14 115.1 -1.2 -1.0%
Current Business Conditions Indicator 110.7 107.4 114.7 Feb-14 - 110.9 7.3 6.8%
Stock Investment Indicator 98.2 108.8 117.6 series high - 108.2 8.8 8.0%
Real Estate Investment Indicator 114.6 109.4 111.0 Mar-14 - 111.7 1.6 1.5%
Car Purchase Indicator 84.7 75.3 82.3 Mar-14 - 80.8 7.0 9.4%
Employment Outlook Indicator 125.5 126.8 125.3 - Jan-14 125.9 -1.5 -1.1%
Inflation Expectations Indicator 143.6 147.7 143.4 - Jul-13 144.9 -4.3 -2.9%
Current Prices Satisfaction Indicator 64.0 67.5 71.3 Feb-14 - 67.6 3.8 5.7%
Interest Rates Expectations Indicator 127.3 132.1 128.6 - Mar-14 129.3 -3.5 -2.7%
58. MNI India Consumer Report - May 201458
East India Overview
Mar-14 Apr-14 May-14
Highest
Since
Lowest
Since
3-Month
Average
Monthly
Change
Monthly %
Change
East India Consumer Indicator 124.6 128.6 107.6 - series low 120.3 -21.0 -16.4%
Current Indicator 112.7 117.5 107.7 - Sep-13 112.6 -9.8 -8.3%
Expectations Indicator 132.5 136.1 107.5 - series low 125.4 -28.6 -21.0%
Personal Finance: Current 109.0 114.8 108.7 - Dec-13 110.8 -6.1 -5.3%
Personal Finance: Expected 128.2 130.1 108.1 - series low 122.1 -22.0 -16.9%
Business Condition: 1 Year 130.5 129.7 94.2 - series low 118.1 -35.5 -27.3%
Business Condition: 5 Years 138.8 148.4 120.2 - Jan-13 135.8 -28.2 -19.0%
Durable Buying Conditions 116.4 120.2 106.7 - Sep-13 114.4 -13.5 -11.2%
Current Business Conditions Indicator 109.3 120.7 99.4 - series low 109.8 -21.3 -17.6%
Stock Investment Indicator - - - - - - - -
Real Estate Investment Indicator 124.2 126.1 111.8 - Dec-13 120.7 -14.3 -11.4%
Car Purchase Indicator 79.9 78.0 64.4 - Nov-13 74.1 -13.6 -17.4%
Employment Outlook Indicator 111.0 106.6 95.1 - Jan-14 104.2 -11.5 -10.8%
Inflation Expectations Indicator 145.1 152.4 122.4 - series low 140.0 -30.0 -19.7%
Current Prices Satisfaction Indicator 72.3 80.7 62.4 - Dec-13 71.8 -18.3 -22.7%
Interest Rates Expectations Indicator 115.3 126.3 113.5 - Mar-13 118.4 -12.8 -10.1%
59. MNI India Consumer Report - May 2014 59
West India Overview
Mar-14 Apr-14 May-14
Highest
Since
Lowest
Since
3-Month
Average
Monthly
Change
Monthly %
Change
West India Consumer Indicator 127.6 125.7 126.9 Mar-14 - 126.7 1.2 1.0%
Current Indicator 115.2 110.0 114.8 Mar-14 - 113.3 4.8 4.4%
Expectations Indicator 135.9 136.2 134.9 - Feb-14 135.7 -1.3 -0.9%
Personal Finance: Current 121.7 122.6 122.3 - Mar-14 122.2 -0.3 -0.2%
Personal Finance: Expected 138.2 136.1 130.3 - Nov-13 134.9 -5.8 -4.2%
Business Condition: 1 Year 128.7 134.2 131.7 - Mar-14 131.5 -2.5 -1.9%
Business Condition: 5 Years 140.8 138.2 142.9 Nov-12 - 140.6 4.7 3.4%
Durable Buying Conditions 108.7 97.3 107.4 Mar-14 - 104.5 10.1 10.3%
Current Business Conditions Indicator 105.0 107.8 107.1 - Mar-14 106.6 -0.7 -0.6%
Stock Investment Indicator 83.3 113.0 121.0 series high - 105.8 8.0 7.1%
Real Estate Investment Indicator 116.8 114.1 113.6 - Oct-13 114.8 -0.5 -0.5%
Car Purchase Indicator 71.2 66.2 77.0 May-13 - 71.5 10.8 16.3%
Employment Outlook Indicator 120.2 119.2 127.1 Nov-12 - 122.2 7.9 6.6%
Inflation Expectations Indicator 160.6 157.7 148.4 - Jul-13 155.6 -9.3 -5.9%
Current Prices Satisfaction Indicator 70.6 70.9 63.1 - series low 68.2 -7.8 -10.9%
Interest Rates Expectations Indicator 142.5 138.8 132.3 - Jul-13 137.9 -6.5 -4.7%
60. MNI India Consumer Report - May 201460
Central India Overview
Mar-14 Apr-14 May-14
Highest
Since
Lowest
Since
3-Month
Average
Monthly
Change
Monthly %
Change
Central India Consumer Indicator 131.9 122.7 124.3 Mar-14 - 126.3 1.6 1.3%
Current Indicator 116.5 117.4 117.9 Dec-13 - 117.3 0.5 0.4%
Expectations Indicator 142.1 126.2 128.6 Mar-14 - 132.3 2.4 1.9%
Personal Finance: Current 126.3 122.3 130.4 Apr-13 - 126.3 8.1 6.6%
Personal Finance: Expected 149.2 130.4 115.2 - series low 131.6 -15.2 -11.6%
Business Condition: 1 Year 128.0 112.5 126.8 Mar-14 - 122.4 14.3 12.7%
Business Condition: 5 Years 149.2 135.7 143.8 Mar-14 - 142.9 8.1 5.9%
Durable Buying Conditions 106.8 112.5 105.4 - Jan-14 108.2 -7.1 -6.3%
Current Business Conditions Indicator 97.5 108.0 112.5 Feb-14 - 106.0 4.5 4.1%
Stock Investment Indicator - 133.3 116.7 - Dec-13 83.3 -16.6 -12.5%
Real Estate Investment Indicator 125.7 121.1 114.3 - Nov-13 120.4 -6.8 -5.7%
Car Purchase Indicator 73.7 75.0 68.8 - Oct-13 72.5 -6.3 -8.3%
Employment Outlook Indicator 111.9 121.4 116.1 - Mar-14 116.5 -5.3 -4.4%
Inflation Expectations Indicator 163.6 152.7 159.8 Mar-14 - 158.7 7.1 4.7%
Current Prices Satisfaction Indicator 76.3 50.9 66.1 Mar-14 - 64.4 15.2 29.8%
Interest Rates Expectations Indicator 139.8 137.5 146.4 Apr-13 - 141.2 8.9 6.5%
61. MNI India Consumer Report - May 2014 61
All India Overview by Age
Mar-14 Apr-14 May-14
Highest
Since
Lowest
Since
3-Month
Average
Monthly
Change
Monthly %
Change
Age 18-34
MNI India Consumer Indicator 124.5 128.1 126.6 - Mar-14 126.4 -1.5 -1.2%
Current Indicator 114.5 118.1 117.5 - Mar-14 116.7 -0.6 -0.5%
Expectations Indicator 131.2 134.8 132.6 - Mar-14 132.9 -2.2 -1.6%
Personal Finance: Current 121.1 126.5 124.7 - Mar-14 124.1 -1.8 -1.4%
Personal Finance: Expected 131.5 130.9 130.7 - Jan-14 131.0 -0.2 -0.2%
Business Condition: 1 Year 121.6 128.6 126.8 - Mar-14 125.7 -1.8 -1.4%
Business Condition: 5 Years 140.4 144.9 140.4 - Feb-14 141.9 -4.5 -3.1%
Durable Buying Conditions 108.0 109.6 110.2 Jan-14 - 109.3 0.6 0.6%
Age 35-54
MNI India Consumer Indicator 126.6 123.6 120.5 - Sep-13 123.6 -3.1 -2.5%
Current Indicator 117.1 111.4 115.1 Mar-14 - 114.5 3.7 3.3%
Expectations Indicator 133.0 131.7 124.2 - Sep-13 129.6 -7.5 -5.7%
Personal Finance: Current 119.4 118.4 121.3 Feb-14 - 119.7 2.9 2.4%
Personal Finance: Expected 134.7 130.3 118.6 - series low 127.9 -11.7 -9.0%
Business Condition: 1 Year 124.0 124.8 120.3 - Jan-14 123.0 -4.5 -3.6%
Business Condition: 5 Years 140.1 140.1 133.7 - Jan-14 138.0 -6.4 -4.6%
Durable Buying Conditions 114.8 104.4 108.9 Mar-14 - 109.4 4.5 4.2%
Age 55-64
MNI India Consumer Indicator 127.3 119.7 118.2 - Jan-14 121.7 -1.5 -1.2%
Current Indicator 114.1 107.8 110.3 Mar-14 - 110.7 2.5 2.2%
Expectations Indicator 136.1 127.6 123.5 - Dec-13 129.1 -4.1 -3.2%
Personal Finance: Current 113.6 117.6 113.6 - Mar-14 114.9 -4.0 -3.4%
Personal Finance: Expected 131.9 127.9 116.7 - Oct-13 125.5 -11.2 -8.7%
Business Condition: 1 Year 133.1 122.1 116.9 - Oct-13 124.0 -5.2 -4.2%
Business Condition: 5 Years 143.3 132.7 136.8 Mar-14 - 137.6 4.1 3.1%
Durable Buying Conditions 114.6 98.1 106.9 Mar-14 - 106.5 8.8 9.0%
62. MNI India Consumer Report - May 201462
All India - Overview by Income
Mar-14 Apr-14 May-14
Highest
Since
Lowest
Since
3-Month
Average
Monthly
Change
Monthly %
Change
< INR 432,000 per annum
MNI India Consumer Indicator 123.4 124.3 123.2 - Jan-14 123.6 -1.1 -0.9%
Current Indicator 114.8 116.1 118.1 Feb-14 - 116.3 2.0 1.7%
Expectations Indicator 129.2 129.8 126.6 - Jan-14 128.5 -3.2 -2.5%
Personal Finance: Current 115.1 124.0 121.7 - Mar-14 120.3 -2.3 -1.9%
Personal Finance: Expected 125.9 125.2 120.5 - Aug-13 123.9 -4.7 -3.7%
Business Condition: 1 Year 117.9 119.0 115.6 - Dec-13 117.5 -3.4 -2.8%
Business Condition: 5 Year 143.6 145.2 143.6 - Feb-14 144.1 -1.6 -1.1%
Durable Buying Conditions 114.5 108.3 114.6 Feb-14 - 112.5 6.3 5.9%
> INR 432,000 per annum
MNI India Consumer Indicator 127.1 133.4 130.6 - Mar-14 130.4 -2.8 -2.1%
Current Indicator 120.0 120.8 120.8 Feb-14 - 120.5 0.0 0.0%
Expectations Indicator 131.9 141.8 137.2 - Mar-14 137.0 -4.6 -3.2%
Personal Finance: Current 128.6 133.5 132.9 - Mar-14 131.7 -0.6 -0.4%
Personal Finance: Expected 134.8 137.2 134.4 - Jan-14 135.5 -2.8 -2.0%
Business Condition: 1 Year 121.0 137.6 132.2 - Mar-14 130.3 -5.4 -4.0%
Business Condition: 5 Year 139.7 150.6 145.0 - Mar-14 145.1 -5.6 -3.7%
Durable Buying Conditions 111.3 108.1 108.6 Mar-14 - 109.3 0.5 0.5%
63. MNI India Consumer Report - May 2014 63
Methodology
The MNI India Consumer Sentiment Survey is a wide
ranging monthly survey of consumer confidence
across India.
Data is collected via telephone interviews. At least
1,000 interviews are conducted each month across
the country.
The survey adopts a similar methodology to the
University of Michigan survey of U.S. consumer
sentiment.
The main MNI India Consumer Indicator is derived
from five questions, two on current conditions and
three on future expectations:
1) Current personal financial situation compared to a
year ago
2) Current willingness to buy major household items
3) Personal financial situation one year from now
4) Overall business conditions one year from now
5) Overall business conditions for the next 5 years
Indicators relating to specific questions in the report
are diffusion indices with 100 representing a neutral
level, meaning positive and negative answers are
equal. Values above 100 indicate increasing positivity
while values below show increasing negativity.
