ANN ARBOR – For the first time, India has started measuring consumer sentiment defined as the degree of confidence the consumers express in the economy through their spending.
The monthly consumer sentiment indicator has been launched in India by the Centre for Monitoring Indian Economy (CMIE) and the Bombay Stock Exchange (BSE) in association with Survey Research Center of University of Michigan’s Institute for Social Research.
“We are very excited to be working with CMIE and BSE on this important and unique initiative. This collaboration will make critical and timely economic data about India publicly available for the very first time,” said Beth-Ellen Pennell, Director of International Survey Operations.
Along with the consumer survey, CMIE will also evaluate the unemployment rate in India separately for both rural and urban areas. Traditionally, governments estimate the unemployment rate. This is one of the few times when a private company is providing this measure.
“The survey and the employment rate are valuable resources. It helps estimate the consumer’s reaction to new government policies and also indicates the economic health of the country,” said Richard Curtin, Director of Survey of Consumers.
ISR was the first group to measure consumer sentiment in the world in 1946 and now, the survey is conducted in at least six dozen countries. Manufacturers, retailers, and banks all use consumer assessments to plan their actions, whether to boost production or home construction.
“In India, the chief beneficiaries of this public good will be the Central Bank, state governments, businesses, academia and the public who want to get a better grip on the macro-economic status of the Indian economy,” said Mahesh Vyas, Managing Director of CMIE.
To get the survey started in India, ISR shared its research methodology with CMIE. The researchers also spent time in India learning how CMIE conducted the survey.
The partnership between ISR and CMIE extends beyond consumer sentiment measurement to include graduate student internships and ISR researchers studying the methodology of data collection in India. And with good reason. The US household survey is conducted with 500 households monthly, while the Indian survey is conducted with 158,624 households three times a year.
Currently, CMIE releases the national consumer sentiment index and unemployment numbers monthly. They hope release state estimates soon. “India is very diverse. What works for one state may not apply to another,” said Vyas.
Curtin also added that benefits of the survey would keep increasing. “The benefits will grow at exponential rate as the accumulated collected data turns into years and then decades,” he said.