Context: The highlights of the Consumer Confidence Survey (CCS) were recently released by the RBI pointing to some all-time lows.
The RBI conducts this survey every couple of months by asking households in 13 major cities about their current perceptions and future expectations on general economic situation, employment scenario, price situation, own income and spending levels.
Based on these specific responses, the RBI constructs two indices: the Current Situation Index (CSI) and the Future Expectations Index (FEI).
The CSI maps how people view their current situation (on income, employment etc.) vis a vis a year ago. The FEI maps how people expect the situation to be a year from now.
It indicates how optimistic or pessimistic consumers are regarding the expected financial situation. If the consumers are optimistic, spending will be more, whereas if they are not so confident, their poor consumption pattern may lead to recession.