ANN ARBOR—For the first time, India has started measuring consumer sentiment—the degree of confidence 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 and Bombay Stock Exchange, in association with the 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,” said Beth-Ellen Pennell, director of the Survey Research Center’s International Survey Operations. “This collaboration will make critical and timely economic data about India publicly available for the very first time.”

Along with the consumer survey, CMIE will also assess the unemployment rate in India for both rural and urban areas. Traditionally, the Indian government estimates the unemployment rate. This is one of the few times when a private company is evaluating it.

“The survey and the employment rate are valuable resources,” said Richard Curtin, director of the U-M Surveys of Consumers. “It helps estimate the consumers’ reaction to new government policies and also indicate the economic health of the country.”

The U-M Institute for Social Research was the first group in the world to start conducting the consumer sentiment survey in 1946. Now, the survey is conducted in more than 70 countries. Manufacturers, retailers and banks all use consumer assessments to plan their actions—whether to boost production and home construction, or to slow it down.

“In India, the chief beneficiaries of the public good will be the central bank, state governments, businesses, academia and the public who want to get a better grip of macroeconomic status of the Indian economy,” said CMIE managing director Mahesh Vyas.

To launch the survey in India, ISR shared its research methodology with CMIE, and ISR researchers also spent time in India learning how the process worked.

The partnership between ISR and CMIE extends beyond consumer sentiment to include graduate student internships and ISR analysis of the data collection in India—and with good reason. The U.S. household survey is conducted with 500 households, while the Indian survey is conducted with more than 150,000 households three times a year.

Currently, CMIE releases the national consumer sentiment index and unemployment numbers monthly. They hope to break it down further to release estimates for each Indian state.

“India is very diverse,” Vyas said. “The sentiments may vary greatly from one state to another.”

More information:

• Consumer Sentiments in India
• Unemployment in India
• Institute for Social Research