New Delhi: After the Covid-19 pandemic severely affected the economy, some green shoots are emerging with 48 per cent consumers willing to make ‘discretionary purchases’ in the coming months in the fields of home renovation and travel, a new survey by LocalCircles has found.
The bi-annual ‘Mood of the Consumer’ survey assessed the consumption practices of Indians during the festival season as well as future purchases.
Published Tuesday, the survey found that between 1 December 2020 and 31 March 2021, 48 per cent consumers are planning to spend between Rs 1,000 and Rs 50,000 in discretionary purchases, which refers to the purchase of non-essential items for recreational and entertainment purposes.
Of the 44,000 survey respondents, 10 per cent are planning to spend over Rs 50,000 in such purchases in the next four months while 21 per cent households will spend between Rs 10,000-50,000.
Home renovation topped the list of discretionary purchases, with 35 per cent consumers voting for it, followed by 14 per cent for white goods (large electrical good), appliances and travel, 12 per cent for smartphones and gadgets, 7 per cent for real estate and 2 per cent for automobiles.
Interestingly, while consumers were willing to make recreational purchases, 61 per cent respondents also expected a decline in their income in the same period. According to individual data, 31 per cent believe that their income will be 25 per cent less than what it was last year, 27 per cent suggested it would be “lower by 5-25%” while 25 per cent believe it will not change.
However, compared to last year, 15 per cent fewer respondents expected a decline in their income.
Also read: Consumer sentiment declines in November for the first time since May, CMIE data reveals
The survey also delved into purchases made by consumers during the festive season. It revealed that 66 per cent respondents said they spent Rs 1,000 or more during this period, which is a 10 per cent increase in the percentage of consumers who had initially planned to do so.
On how the pandemic hit household savings from April to November, 68 per cent consumers said their savings dropped. Of these, 28 per cent said it was down by more than half and 25 per cent noted the decline was between 0-25 per cent.
The Covid-19 pandemic worsened India’s already flailing economy with the country’s GDP contracting by a record 23.9 per cent in the June quarter. In the September quarter, there was an improvement with the economy contracting at a slower place.
Many households saw a drop in their incomes and therefore the overall consumer spending was lower than last year till August.
A V-shaped recovery in the economy has been suggested by many economists. Several sectors are witnessing a revival with the manufacturing industry seeing a 0.6 per cent growth in September as compared to a 39.3 per cent contraction in the first quarter.
Also read: WPI inflation rises to 9-month high of 1.55% in November as manufactured items turn costlier