According to the Reserve Bank of India (RBI), consumer confidence has dropped to its lowest level since 2014, the year Prime Minister Narendra Modi came to power.
The Central Bank survey for the month of November reveals that current index fell to 85.7 in November from 89.4 in September. Anything below 100 suggests a negative outlook.
The future expectation gauge also looked gloomy, falling to 114.5 from 118.0 previously.
The survey was conducted in 13 cities including New Delhi and Mumbai.
The worrying part for the government is the perception of inflation, as respondents believe that commodity prices will continue to surge in the next 12 months.
“Most respondents perceived prices as having increased during the last one year, and they expect further rise in prices in the year ahead; households’ sentiments on overall spending remained resilient,” said RBI.
Finance Minister Nirmala Sitharaman played down recession fears. The minister said that the economy may have slowed down, but it would never slip into recession.
On 5 November, RBI sharply reduced the annual growth forecast for the economy to 5 percent for the year 2019-20 compared with an earlier forecast of 6.1 percent. RBI governor Shaktikanta Das said that several sectors had seen a slowdown but with the steps announced by the government, but a recovery may be possible in the second half of 2020.