The coronavirus lockdown poses a significant economic cost and a majority of households don't have revival hopes owing to fall in income, a report said. The consumer sentiment fell to its lowest since 2015 after the nationwide lockdown was announced on March 24, Mahesh Vyas, MD, CMIE, said in the report. The consumer sentiment index declined to 52 by March 29, a 47 per cent fall in a single week, implying a drastic impact on household sentiment. The index stood at 102.5 in the first week of March, the report added. The index has never fallen so low and never by such a magnitude, implying that the households were hit hard by the lockdown, it said.
"This extremely bleak view of the future makes the task of an economic revival after the lifting of the lockdown challenging," Mahesh Vyas also said. The households are also not optimistic about the business conditions improving a year later. Only 2 per cent of the households see business conditions improving over the next one year and 59 per cent see it worsening, the report said.
The report also said that the proportion of households that considered it to be a good time to buy consumer durables declined from 24 per cent in the first three weeks of March 2020 to 7 per cent in the last week. It then plunged to just 2 per cent in April's first fortnight.
"Household decisions to buy durables are not based only on incomes but to a great extent on sentiments and their perceptions about their future well-being. Evidently, this perception is severely damaged during this lockdown. In the current situation, non-availability of goods in the market could have also possibly played a small role," it added.
Meanwhile, the government on Wednesday identified 170 districts as coronavirus hotspot districts across the country. The districts where either the absolute number of coronavirus positive cases reported or the rate of growth of cases is high or where doubling time is low have been termed as hotspots or red zones. The government has also identified 207 districts as non-hotspots, while the rest have been classified as green zones. Non-hotspot areas also have reported positive cases but the number is limited.