Coupled with stagnant incomes, more urban consumers feel pessimistic about the overall economic situation of the country
| Photo Credit: MANSI THAPLIYAL
This March, while a significant share of urban consumers remained optimistic about job opportunities, many continued to be pessimistic about income levels. This suggests that although jobs are available in urban areas, income growth has stagnated. Notably, pessimism around income levels is even more pronounced in rural areas.
Moreover, a majority of urban consumers said that commodity prices have risen compared to a year ago and, as a result, their spending has increased. Coupled with stagnant incomes, this has led to a greater share of urban consumers feeling pessimistic about the overall economic situation of the country despite improved sentiment regarding employment.
Urban perceptions are drawn from a Reserve Bank of India (RBI) survey conducted between March 1 and 10, 2025, covering respondents from 19 major cities. Rural perceptions are based on the first edition of a separate RBI survey, which gathered responses from households in rural and semi-urban areas across the country in the same period.
Chart 1 shows the share of urban respondents who said that their employment opportunities have increased compared to a year ago. In March, 35.5% of respondents had said that their employment scenario had improved compared to a year ago, maintaining almost the same level recorded in the last one year.
Chart 1 | Share who said that their employment opportunities have increased compared to a year ago (urban)
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Chart 2 shows the share of urban respondents who said that their income levels have increased compared to a year ago. Only 23.8% claimed that their income levels have increased compared to a year ago — close to 12% points less than those who said that the job outlook has improved.
Chart 2 | Share who said that their income levels have increased compared to a year ago (urban)
The steady recovery in perceptions about income levels, since the pandemic-related peak pessimism, saw a reversal in March 2024. From that month, optimism about income levels started to dip again. This negative trend persisted into March 2025 as well, with fewer than one in four urban respondents reporting any improvement in their income levels.
Charts 1 and 2, when read together, suggest that while a decent number of jobs are available in urban areas, income levels remain largely stagnant, as noted earlier.
Chart 3 presents the share of urban and rural respondents who reported a decline in their income compared to a year ago.
Across all surveyed months, a consistently higher proportion of rural respondents expressed pessimism about their income levels compared to their urban counterparts. In March this year, 29.9% of rural respondents said that their income levels have declined compared to a year ago, higher than the 23.3% who said the same in urban areas.
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Chart 4 illustrates the share of urban respondents who said that commodity prices have increased over the past year. As of March, over 90% continued to report that prices were higher than a year ago.
This perception appears to have influenced spending behaviour. Chart 5 shows the share of urban respondents who said that their spending has increased compared to the previous year. In March, over 80% reported higher spending levels compared to a year ago.
Chart 5 | Share of urban respondents who said that their spending has increased compared to the previous year
Charts 4 and 5 indicate that rising prices have led to higher spending. However, as Chart 2 shows, income levels are stagnant. This suggests that many urban residents may be struggling to make ends meet despite retaining their jobs. This had an effect on the overall economic perception of urban residents. Only 34.7% of them said in March that the overall economic situation has improved this year, compared to last year. This is the lowest such share of respondents in over a year (Chart 6).
Chart 6 | Share of urban respondents who said that the economic situation has improved compared to a year ago
Source: Reserve Bank of India’s urban and rural consumer confidence surveys
Also read: A 11-year high of 55% urban residents report stagnant income in 2025
Published – April 16, 2025 07:00 am IST