Euphoria over the new government is starting to weaken as consumers sense no major shift in economic conditions, revealed a study.
According to ZyFin Research, a financial research and analytics company, Consumer Outlook Index data for August indicates that consumer confidence has waned marginally for the second consecutive month.
This decline is primarily due to weakening in sentiment toward job security and willingness to spend on big-ticket items, it added.
The ZyFin Consumer Outlook Index of India (COI), at 43.6, is 0.6 points lower than in the previous month.
Although the score remains higher than in any of 12 months of 2013, a decline at this stage of the economy's healing process could catalyse a setback, with consumer spending, a major contributor to India's growth story, ZyFin said.
Last month, of the 18 cities surveyed, only 7 showed improvement in consumer confidence as compared to the previous month. The five cities with the highest scores were Mangalore, Hyderabad, Delhi, Indore and Mumbai.
ZyFin Research Chief Economist Debopam Chaudhuri said: "The sudden dip in confidence levels illustrates the short attention span of Indian consumers. While economic recovery is a long-drawn process, and results cannot be expected overnight, low consumer confidence can overturn all positive measures taken so far."
The COI reflects current and future spending plans, employment and inflation outlook of urban Indian consumers. It comprises three major components, measuring consumer sentiment on spending, inflation and employment.
It is based on a monthly survey of 4,000 consumers in 18 cities across India.
