India: CMIE: Rural markets shine

• Consumer sentiments have improved well in Sep 21. As of 25 Sep 21, the index of consumer sentiments stood at 58.2. It was 53.9 in Aug 21 and 53 in Jul 21. (The index has a base of 100 in Sep 15-Dec 15.)
• The improvement in Sep 21 is across rural and urban regions but, it is rural India that continues to hold promise in spite a few setbacks in recent weeks.
• In a short span of just 12 days the rural index scaled up from 56.8 as of the end of Aug 21 to 64.2 as of 12 Sep 21. This translates into an impressive 13% gain in just 12 days of the month. Sep 21 seemed headed for another spectacular increase in rural sentiments.
• The performance seen in September so far is particularly inspiring because it comes on top of three consecutive months of gains in the rural consumer sentiments index.
• The rural sentiments index has more than regained the losses it suffered during the second wave of Covid-19. It is this recent momentum in the rural sentiments index that is particularly promising.
• It is likely that the rural consumer sentiments index will end Sep 21 at a level higher than seen in any month since the first wave of Covid-19.
• Urban India has been lagging the rural hinterlands on consumer sentiments. For example, on 25 Sep 21, the rural consumer sentiments index at 61.7 was 20.5% higher than the urban index of consumer sentiments which was at 51.2.
• Urban India seems to be facing greater challenges at the moment given that it has a slightly higher inflation rate at 5.32% compared to rural India’s 5.28% and a much higher unemployment rate at 8.8% compared to rural India’s 6.2%.
• While urban India has lost nearly 2 million jobs or, about 1.5% of the jobs in Mar 20, rural India has offered 1.4% more jobs compared to Mar 20.
• While rural India is able to provide some employment during times of distress, urban India is unable to do the same. As a result, while urban household incomes are depressed, rural household incomes are looking up.
• Consumer sentiments and household incomes data show that festivities could be brighter in rural India this year.

External Link : https://economicoutlook.cmie.com/kommon/bin/sr.php?kall=wshreport&nvdt=20210927155505993&nvtype=INSIGHTS