There are two ways you can read the BT-Indica Research Index of Consumer Sentiment (BT-IRICS) for February 2004. At 163, its highest in 18-months, the index-which measures consumer confidence across 10 major cities-has merely inched five points from an already high-and-happy 158 in September 2003. The index ought to have done much better given that these five months saw some really heart-warming developments-peace talks with Pakistan, a bumper crop, pre-election sops from the government and above all a resurgent economy.

On a more happy note, and that's the real story here, even though the index hasn't moved much, most individual parameters of consumer sentiment have shot up. Price-adjusted real income is hugely up and so is expectation on income and business environment. Purchase intent is in sync with the upbeat sentiment and is very buoyant.

What's holding the index down is the perpetual concern on prices and jobs. With inflation at a high of 5.8 per cent, the negativity on prices is real. So is the overwhelming concern for jobs in a country with 27 million unemployed, even though 2.2 million new jobs will be created across sectors like telecom, retail, it, BPO, insurance and healthcare in the next two years. For the consumption mood to continue, the government of the day, post-elections, has to immediately address these issues lest they spoil a perfectly laid out party.

For now, marketers need not lose heart. Comparison of the index in January 2003 at 136 and how the year played out-a stupendous 28 per cent growth in automobiles, 15 per cent plus in textiles & apparel, even a growth rate touching double-digits in the otherwise declining Rs 40,000-crore fast moving consumer goods-should be indication enough of the bounty that awaits them, well other things remaining same, when BT-IRICS stands a good 20 per cent ahead in February 2004!

There is across the board opinion amongst marketers that this growth is sustainable. Well, they now only need to do enough to engage consumers' upbeat sentiment. The mantra is to create a buying season-rationalise price, create shopping festivals, ride with promotions on high involvement events such as the upcoming India-Pakistan cricket series et al.

It seems to be the season of plenty all around. "Such is the feeling of optimism that marketers across the board are not only upping ad spends by around 15-20 per cent but are loath to miss any advertising opportunity, no matter how small," says Satyajit Sen, Associate Vice President, MediaCom. Barring any major geo-political blunder or a disastrous monsoon this year, we are clearly into positive territory.

-additional reporting by Arnab Mitra, Dipayan Baishya and Supriya Shrinate

INDICA RESEARCH INDEX OF CONSUMER SENTIMENT-FEBRUARY 2004 The Indica Research Opinion It's The Real Thing

Indica Research's Executive Director B. Narayanaswamy The Indica Research Index stands at 163, a touch higher than it was in September 2003 (158). It is a clear increase from where it was a year ago in January 2003 when the indexed figure stood at 136. It had stayed pretty much unchanged from January to May last year. The upswing was in September 2003. The sentiment on all the constituent elements has improved now when we compare it to the status a year back. The trend in the sentiment is however clear. The feeling that 'now' is a good time to buy auto has consistently gone up; as have the actual auto sales. Durables have picked up too. Expectations on business conditions next year have improved further from September 2003. The expectations on prices and employment over the next year however have simply not changed. They were, and are, low. HOW WE DID IT » Total sample 1,209 » 10 cities: Delhi (122), Mumbai (120), Chennai (117), Bangalore (127), Hyderabad (120), Kolkata (123), Ahmedabad (120), Lucknow (121), Cochin (119) and Nagpur (120) » Purely random sampling process; 609 male and 600 female; SEC A 600 respondents and SEC B 609 respondents » Face-to-face interviews using a structured questionnaire » The questionnaire covered three core areas: current assessment of economic situation, expectation about the future economic situation and overall consumption mood » Besides key variables for indexing, the survey also measured explanatory measures » All data was weighted; each variable first indexed for Nett optimism » Data then indexed as proportion of total score possible » This index then weighted to arrive at the All India Index of Consumer Confidence Good corporate results, pay hikes, the 'feel-good' that a buoyant stockmarket and abundant monsoons create in an average sec A/B householder, availability of finance, sops provided by the government, perceptions of overall business conditions... are all clearly not enough to translate into a positive outlook on these. Some telling action is called for, to evoke that feeling on job creation and employment; and on the behaviour of prices. There are sectors where all the employers seem to look for is a running pulse and yet have a problem finding people. Competition is pummelling down the prices in telecom. Then why the quizzical reluctance to let feelings go on these two counts on the part of the consumer? It's likely it's because the centre of gravity is shifting to the employer in the larger context. So, the average householder can be expected to intuitively pause before spending that money. Unless, of course, the increases in income is at such a high level that a sudden whoosh of disposable income is created. So businesses will have to learn to live with the fact that exit policies and 'higher power of employer' and so on do have a flip side-the uncertainties go up in the minds of the employee-the chap planning to buy that aftershave or ac. To paraphrase David Ogilvy, the consumer is not a moron-she is your employee.