The Reserve Bank of India (RBI) conducts the Consumer Confidence Survey (CCS) to evaluate how households perceive the current and anticipated economic landscape. This survey consists of two crucial components: the Current Situation Index (CSI) and the Future Expectations Index (FEI).
The Current Situation Index measures households' perceptions regarding their existing economic conditions. In contrast, the Future Expectations Index reflects their outlook for the upcoming year. A score below 100 indicates pessimism, while a score above 100 denotes optimism.
In May 2025, the CSI for urban households decreased slightly to 95.4 from 95.5 in March 2025. Despite this decline, the FEI improved, rising to 123.4 from 122.6, suggesting increasing optimism about future economic conditions.
For rural households, the CSI also saw a minor decline, slipping to 100.0 in May 2025 from 100.1 in March 2025. However, the FEI increased to 126.2, indicating strong optimism regarding forthcoming economic developments.
Both urban and rural households exhibit some concern regarding their current economic situations, particularly related to employment and income stability. Nonetheless, there is a growing sense of hope about future conditions, driven by expectations of enhanced agricultural productivity and consistent rural demand.
Inflation perceptions among households have also shifted. In May 2025, the current inflation perception fell by 30 basis points to 6.3%, while the one-year-ahead expectations decreased by 20 basis points to 8.9%. This trend implies a belief that food and retail prices will likely stabilize.
The Consumer Confidence Survey is vital for policymakers and analysts as it provides insight into household sentiments. These sentiments significantly influence consumer spending, saving habits, and investment decisions. An increase in the FEI can indicate a boost in future demand, which is essential for effective economic planning.
Q1. What is the RBI’s Consumer Confidence Survey?
Answer: The RBI’s Consumer Confidence Survey (CCS) evaluates how households perceive the current and future economic conditions through two indices: the Current Situation Index (CSI) and the Future Expectations Index (FEI).
Q2. How are the indices calculated?
Answer: The CSI assesses households' views on their current economic conditions, while the FEI gauges their expectations for the next year. Scores below 100 indicate pessimism, and above 100 indicate optimism.
Q3. What were the findings for urban households in May 2025?
Answer: The CSI for urban households fell slightly to 95.4 in May 2025, while the FEI rose to 123.4, reflecting increased optimism about future economic conditions despite current concerns.
Q4. How did rural households perform in the survey?
Answer: Rural households saw a slight decline in the CSI to 100.0 in May 2025, but their FEI rose to 126.2, showing strong optimism for the year ahead.
Q5. Why is the Consumer Confidence Survey important?
Answer: This survey is crucial for understanding household sentiment, which impacts spending, saving, and investment decisions. Improved FEI scores can signal stronger future demand, aiding economic planning.
Question 1: What does the Current Situation Index measure?
A) Future economic expectations
B) Current economic conditions
C) Inflation rates
D) Employment statistics
Correct Answer: B
Question 2: A Future Expectations Index score above 100 indicates what sentiment?
A) Pessimism
B) Neutrality
C) Optimism
D) Concern
Correct Answer: C
Question 3: What was the FEI for urban households in May 2025?
A) 122.6
B) 123.4
C) 95.5
D) 100.0
Correct Answer: B
Question 4: How did rural households' FEI change in May 2025?
A) Decreased
B) Remained the same
C) Increased
D) Unknown
Correct Answer: C
Question 5: What trend was observed in current inflation perceptions for households in May 2025?
A) Increased
B) Decreased
C) Stabilized
D) Unchanged
Correct Answer: B
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