High inflation and slower growth continues to worry Indian consumers with more people expecting lower salary increases, said the survey, which interviewed 2,602 respondents across 10 cities and rural areas in India.
This is in sharp contrast with other fast-growing economies like Indonesia, where the increase in minimum wages is likely to keep consumer sentiment robust, and in China, where sentiment remains strong on the back of purchases by consumers from lower income groups, the report released on Wednesday said.
"There are signs of down trading in discretionary items in India. Fewer people are buying smartphones and more now want to buy an entry-level car," said Arnab Mitra, research analyst with Credit Suisse.
"More and more consumers are postponing big-ticket purchases.. This situation will take more than a couple of quarters to improve," he said.
Last week, investors knocked down shares of India's largest consumer company Hindustan Unilever by 5 percent after the it reported weak volume growth as consumers cut purchases of products such as packaged foods and personal care items.
The report, however, said the long-term growth potential in India remained intact due to low product penetration in most categories.
The PM and his cabinet have implemented something that is good for India Inc., but not for its people. Mr. PM should look at how the salaried man has to live, with increasing prices, bad roads, bribery for anything and every government transaction, lesser money to save, no increments, no great change in taxation structure. The only people benefiting from these economic policies are Ambanis, Tatas, Foreign Investors and big conglomerates. What have you done, Mr. PM Sir, for the Indian Common Man?
What else can one expect, given that the government increased petrol and diesel prices, basic necessities' cost has gone up. People in India value long-term savings over short-term discretionary spend. Companies have also taken advantage of the situation and given their employees an outlook of single digit increments. The poor Indian middle-class and salaried individuals are badly affected in this entire fiasco by the government, which now wants to increase the PF contribution as well, as if the taxpayers' money going to MP's own pockets was not enough.