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The MNI India Consumer Sentiment Indicator fell 1.1% to 114.1 in October from 115.3 in September, the lowest level since the start of the survey in November 2012.

Rate cuts have done little to stop the decline in consumer sentiment throughout 2015 and this month proved no different, with consumers unstirred by the late September 50 basis point cut to boost economic growth. While the indicator remains above the 100 level, meaning optimists still outweigh pessimists, it has fallen nearly 8% over the past year.

The September release saw a drop in confidence in household finances, with both current and future measures falling to record lows. Almost 95% of respondents said they used the majority of their income on daily expenses, with very little to save. 56.5% of respondents, the highest proportion on record, said they did not save any part of their income.

A weaker financial situation made consumers wary about purchasing big-ticket items in spite of the various festive offers. The Durable Buying Conditions Indicator, which provides a guide to consumer spending, was lower than would normally be expected given the time of year, averaging 110.6 in the three months to October, 3.2 points below the same period last year.

Respondents were also the least optimistic about the current business environment since May 2014.

Concerns about the economy were mirrored in respondents' views on the labour market. The Employment Outlook Indicator fell for the second consecutive month to the lowest since October 2014.

While official data has shown inflation coming down this year, inflation expectations have been trending higher since the first quarter and increased to the highest since May 2014 in October. The continued rise in the Inflation Expectations Indicator suggests that we have seen the trough in inflation this year.

Commenting on the latest survey, Chief Economist of MNI Indicators Philip Uglow said, "Consumers appear oblivious to the efforts of the Reserve Bank of India to boost growth, with consumer sentiment falling to a new record low in October. While monetary policy works with a lag, the lack of announcement impact on survey respondents suggests they are not convinced that action by the central bank will improve either the fortunes of their household or the economy more generally."

The MNI India Consumer Sentiment Survey is a wide ranging monthly survey of consumer confidence across India.

Data is collected via telephone interviews. At least 1,000 interviews are conducted each month. The survey has been in place since November 2012. The survey adopts a similar methodology to the University of Michigan survey of U.S. consumer sentiment.

The main MNI India Consumer Indicator is derived from five questions, two on current conditions and three on future expectations:

1) Current personal financial situation compared to a year ago
2) Current willingness to buy major household items
3) Personal financial situation one year from now
4) Overall business conditions one year from now
5) Overall business conditions for the next 5 years

Indicators relating to specific questions in the report are diffusion indices with 100 representing a neutral level, meaning positive and negative answers are equal. Values above 100 indicate increasing positivity while values below show increasing negativity.