A 11-year high of 55% urban residents report stagnant income in 2025

Urban consumers in India began the new year with both hope and concern. On the one hand, India’s retail inflation eased to a five-month low of 4.31% in January, providing some relief to consumers by reducing the pressure on their household expenses. On the other, worries about the employment scenario continued to weigh on them.

Income levels too have been stagnant — in January, 55% of urban consumers reported that their income levels had remained unchanged compared to the same period last year. This is the highest such share in nearly 11 years.

As concerns over stagnant income levels overshadowed any optimism about reduced expenses, a growing share of urban consumers remained pessimistic about the broader economic outlook as the new year began, says the Reserve Bank of India’s Consumer Confidence Survey, which was conducted across 19 major cities in January. It covered 6,081 respondents, of which 52.4% were women.

Chart 1 shows the share of respondents who said that the prices of commodities had increased/decreased/stayed the same in January 2025 compared to a year ago. 

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The share of respondents who reported an increase in prices in January this year (93%) was the lowest since July last year. Around 1% of the respondents said that prices had declined, which has been the case since the pandemic. An increasing share said that prices had continued to remain the same.

Chart 2 shows the share of respondents (%) who said that the spending on essential items increased/decreased/stayed same

The 87.6% who said that spending on essential items had increased was the lowest since September 2024. Less than 2% of the respondents felt that spending on essential items had declined, aligning with the past trend. Close to 11% felt that it had remained the same.

Chart 3 shows the share of respondents (%) who said that the spending on non-essential items increased/decreased/stayed the same

There was a slight increase in the share of respondents who reported that their spending on non-essential items had remained unchanged compared to a year ago. The share of those who stated that their spending had increased declined marginally in January 2025.

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Overall, on the spending front, conditions have slightly improved or have at least not deteriorated further, as reflected in Charts 1, 2, and 3.

Chart 4 shows the share of respondents (%) who said that their income levels increased/decreased/stayed the same

The share of respondents who reported that their income levels had remained unchanged compared to a year ago reached a record high in January. There was a decrease in the share of respondents who indicated a decline or an increase in their income.

Chart 5 shows the share of respondents (%) who said that job opportunities improved/worsened/stayed the same

About 42.7% reported a decline in job opportunities compared to a year ago. Following the sharp drop in the employment sentiment during the pandemic, there had been a steady recovery since, with an increasing share of respondents reporting improved job opportunities. However, this trend reversed in mid-2024, as pessimism about the job market began to grow. This pessimism has deepened further in the current year.

Charts 4 and 5 reveal growing challenges on the income front. Job opportunities are becoming increasingly scarce, and those who are employed are grappling with stagnant income levels, highlighting the mounting financial pressures faced by urban consumers.

 Chart 6 |Share of respondents (%) who said that general economic situation improved/worsened/stayed the same

Pessimism over stagnant income levels has had a significant impact on consumers, with 43% of them stating that the overall economic situation had worsened in January compared to the same period last year. This is the highest such share in at least a year (Chart 6).

Also read: Confidence about economy declines after consistent recovery