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India Income Expectations are at highest ever levels since 2014 (Urban)

By Crowdwisdom | October 08, 2018

In what can be seen both positively and negatively, Income expectations have reached a level not seen since December 2014. 


The latest RBI Consumer Confidence survey was released 3 days ago. It shows that NET income expectations have reached a level not seen since December 2014. This is a pure URBAN survey. 



Is this Good News?

Simplistically speaking, more voters expecting higher incomes is a good thing because they are perhaps seeing some reasons for those expectations. It might suggest an improvement in the current or future economy. 

In reality, the situation is more complex, let us demonstrate this by answering the following two questions?

What is the gap between future expectations and current Income performance



THE GAP BETWEEN FUTURE EXPECTATIONS AND CURRENT PERCEPTIONS OF INCOME GROWTH IS THE HIGHEST IN THE LAST 6 YEARS. Consumers in Urban India appear to be extremely bullish about their income growth while simultaneously also having poor experiences of income growth. Quite a complex environment

Are such bullish feelings justified?

If one looks at the previous high which is during demonetisation of 2016, one can say with some degree of confidence that such bullishness must be quite misplaced and often driven by political and other factors. Having said that, what is the data saying?

Everytime, expectations on income have soared, the gap from reality has also been quite high. In other words, many consumers with high expectations of income growth may end in disappointment. This is not good news for the BJP with the elections ahead just 6 months from now. Of course, if income growth jumps significantly, it will be all turn out very well for the BJP















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