Rising inflation and lay-offs top concerns for Indians: Kantar

Kantar, the world’s leading marketing data and analytics company has just released findings from the third edition of its India Union Budget Survey. This survey maps consumer sentiments and expectations from the union budget 2024, just ahead of its unveil on Feb 1st.
2024 will see the world’s largest and oldest democracies vote in the national elections; and generally Indians expect these elections to broadly favour the Indian economy and its people. However, the global slowdown, economic uncertainty and multiple international cross border conflicts threaten to play spoilsport.

Key highlights from the survey:

Overall, 70% of urban Indians were happy with the 2023 budget, claiming that it positively impacted their household.
Despite not expecting too much from an interim (pre-election) budget, consumers do hope for policy change announcements with respect to income tax brackets to help supplement their disposable income:

Increasing basic income tax exemption limit (from current INR 3 Lacs/ USD 3.6K) is the most common expectation; along with increasing the standard deduction from INR 50K/ USD 610 to INR 1 Lac/ USD 1.2K.

Increasing the threshold limit of highest tax slab from current INR 15 Lacs/ USD 18.2K or decreasing the highest tax rate of 30% applicable on income over INR 15 Lac/ USD 18.2K is notably higher among the businessmen/ self-employed segments.

Across consumer cohorts, there is an expectation that the government will increase the limit for deductions under Section 80 for medical insurance premium.

70% of the consumers surveyed want increased tax rebate on investments under section 80C (PPF, Tax Saving Mutual Funds/ ELSS, National Saving Certificate).

At 57%, Indians voice ‘rising inflation’ as their key concern. An erratic monsoons/ climate change that could impact the agriculture yield is also seen as another important concern area, as it’s a direct contributor to inflation.

Another important personal apprehension is around job security and lay-offs, with every 1 in 3 Indians concerned about the same. This has increased considerably over 2023, when 27% (1 in 4) Indians were stressed about.
At a global level, the recession and slowdown (48%) continue to plague consumers and multi-nation conflicts (45%), continues to be areas of worry as well.

Overall, Indians expect the union government to play the role of a protectionist and shield the country from these issues, with the 57% believing that India will continue to grow faster than most economies in 2024.

However, over 50% Indians believe that it will at least another 3 – 4 years before the Indian economy hits the 5 trillion mark.
India is a young country with an ever-increasing number of start-ups and new-age businesses. Almost 75% of consumers surveyed expect the financial performance of these companies to continue to improve in 2024.

Consumers expect the government to continue to invest in technology. As we move towards becoming a digital economy, digital payment methods are getting increasingly common even for day-to-day household expense payments.

A whopping 80% of Indians claim to use UPI/ e-wallets (53%) and debit/ credit cards (27%) frequently for day-to-day household expenses. This proportion is even higher with salaried class at 86%; as compared to 72% amongst the self-employed and businessman segment.
Concerns around climate change and its impact on the future is leading Indian consumers to become progressively open towards electric mobility.

Among those intending to buy new vehicles (either 2W or 4W) post 2024, a sizeable proportion (61%) are considering an EV purchase.

However, consumers also expect the government to incentivise this shift towards EV’s. More than 40% are seeking immediate monetary benefits during the purchase stage itself, ranging from upfront discounts, reduced road tax and reduced vehicle registration fee.
In the wake of economic growth expectations and evolving consumer sentiments, there are sizeable proportions of consumers who predict an increase in their discretionary spendings (58%) and on high ticket/ high-value items (51%) over last year.
With the markets fluctuating considerably over the last one month, only 1 in 5 Indians believe that the Sensex will cross 80,000 by year end, with a third expecting it to stay in the range of 76000-80000.

Commenting on this year’s survey, Deepender Rana, Executive Managing Director- South Asia, Insights Division, Kantar, said “With 2024 being an election year, we expect the government to be sharply attuned to the sentiment of the masses. Indians continue to be largely positive about the macroeconomic performance of country and belief in the India growth story is quite strong. However, they are worried about global economic slowdown and inflationary factors and there is increased nervousness around job stability versus last year. Most expect the government to play twin roles, a protector by taking stringent measures against inflation and a benefactor by giving a middle-class friendly budget with relief in income taxes.”