CMIE Report: Financial condition of urban families improved due to reduction in interest rates and inflation, decline in rural sentiments

Urban households' financial situation has been improving significantly on account of a decline in interest and inflation. This can be inferred from the Urban Consumer Sentiment Index, which increased for the second month running to 108.8 in April, which is a one-year high. It was 107.7 in March and 104.3 in February. Tensions between India and Pakistan are likely to further upset sentiments, says the Centre for Monitoring Indian Economy (CMIE).

According to CMIE, there has been a good increase in urban perceptions in March-April 2025. Urban families appeared excited about their current economic conditions and were also optimistic about future prospects. The jump in perceptions must be broad-based. It is not limited to families of a particular business group. Perceptions of urban business-engaged families, salaried families and families of small traders and daily wage laborers have also increased. The urban index of current economic conditions (ICC) increased by 0.8 percent in April and 4.5 percent in March. The urban ICC declined by one percent in three months. ICC tells the assessment of the current income of families. It also tells whether this is the right time to buy consumer durables.

ICC increased from 34.3 percent in February to 39.4 percent in April. People believe that this is a good time to buy consumer durables. The proportion of such people increased from 32.2 percent in February to 36.7 percent in April. The proportion of pessimistic families decreased in both cases during this period.