all about? What do the numbers indicate? Here is an explainer. The Reserve Bank of India, on 04 October 2019, published the results of Consumer Confidence Survey of the September 2019 round. The survey revealed that consumer confidence had declined further as compared to the previous surveys. As a part of this survey, perceptions of people on economy, employment and other general relatable economic concepts which are confronted by households on a daily basis are recorded. Under the same headings, what respondents are anticipating in the next one year is also recorded. But, what is the Consumer Confidence Survey?How is it carried out? What is its significance? This story elucidates the purposeof this quarterly survey, methodology involved, and sample used in the study.The recent trend in consumers’ confidence is also examined in this story. What is the Consumer Confidence Survey? Why is it significant? Consumer Confidence Survey is a quarterly survey conducted by the Reserve Bank of India (RBI) to ascertain how confident people are about the economy. It indicates how people perceive the economy to be and how, according to them, it will be in the following year, giving insight into the country’s economic prospects. The survey also reflects consumption patterns of consumers based on how much they spend. It is apparent that greater confidence amidst the respondents implies consumers are willing to spend more money and this might lead to positive economic growth. In case the consumers exhibit lower confidence, it is an indicator that consumers are not willing to spend and hence may indicate a slowdown in general. This is because consumers are apprehensive and think twice before spending their hard-earned money. Similar surveys are conducted in other countries as well with slight variations. How is the survey carried out? Earlier, only the six metropolitan cities inthe country were given prominence in the survey. Each of these six cities – Bangalore, Chennai, Hyderabad, Kolkata,Mumbai and New Delhi, was divided into three major areas which werefurther subdivided into three sub areas. From each sub area, 100 urbanhouseholds were selected randomly. Thus, we have 900 respondents from each citytotalling to 5400 respondents across the six cities. Those responses which aresuitable for further analysis are used to produce the results. Around 5000records are analysed every three months. The questionnaire used for the survey is also published by theRBI. Seven more cities are being covered in the survey since 2018 This survey has been regularly conducted by theRBI since June 2010. Since September 2017, the number of cities has been extendedto thirteen. The new additions to the list are Ahmedabad, Bhopal, Guwahati, Jaipur, Lucknow,Patna and Thiruvananthapuram. The number of households surveyed in each city isproportionate to the number of households recorded in Census 2011. However, thetotal sample size has been maintained at 5400. The number of records analysedstill revolves around 5000. What are the factors that are taken into consideration in the survey? Through the survey, qualitative information iscaptured. The questions covered in the survey are related to the respondent’sopinion on the economic situation, price levels and inflation, employmentprospects, income and spending pattern. Since March 2015, questions pertaining to householdcircumstances such as assets, real estate, gold and motor vehicle were omittedfrom the schedule. How is the assessment carried out and How is the index calculated? The assessment is carried out in two scales- perceptions andexpectations. Perception is how the current situation is as compared to theprevious year and expectation is what they are expecting it to be in the comingyear. Responses are recorded on a three-point scale, whether the financialcondition has/will improve, worsen or remain constant. Under each of thisscale, number of respondents who had similar opinion is expressed as thepercentage of total number respondents. Net responses, also termed as netbalances, is arrived at by subtracting the percentage of respondents whoreported a decrease from the percentage of respondents who reported anincrease. Thus, it can take any value in the range -100 to +100. Current Situation Index (CSI) and FutureExpectation Index (FEI) are two indices which are calculated in order todetermine consumer confidence. These indices are calculated using the averageof net responses of parameters such as income, spending, economic situation,employment and price level for the current year and the following year,respectively, as the names suggest. The indices can take a value between 0 and200.