Demonetisation severely dents buying sentiment in December

MUMBAI: The purchasing sentiment of Indians during December fell steeply by 0.42 points due to demonetisation with the Buying Propensity Index (BPI) standing at 0.26 points, a nine-month low, according to TRA Reserach.

The BPI in November 2016 had stood at 0.68 points.

"The country's buying sentiment was consistently recovering since July 2016, but the surprise demonetisation announcement was the biggest factor causing unnatural fluctuations in the buying sentiment as reflected by the Index," TRA Research CEO N Chandramouli said today.

Noting that the buying sentiment in December has fallen precipitously to the lowest in nine months, he said the the December drop was probably when the pain of demonetisation began to be felt more severely after the first salary cycle.

The Index, based on research across 3,000 consumer- influencers across the eight tier I cities, found that Delhi was most severely impacted with a month-on-month fall of 122 per cent in citizen keenness to buy, registering a negative sentiment in December at -0.14, followed by Kolkata with a BPI fall of 90 per cent.

The three cities which showed a medium fall in BPI were Mumbai (58 per cent), Pune (46 per cent) and Chennai (35 per cent), while, Bengaluru and Hyderabad had a lower negative impact of the note ban with a drop of 16 per cent and 15 per cent, respectively.