Consumer confidence in urban India picked up by 2.5 per cent in February after a slump of 7.3 per cent in the previous month as tax exemptions in Union Budget 2020 boosted the mood, says market research company Ipsos.

According to the latest India Primary Consumer Sentiment Index (PCSI), by Refinitiv-Ipsos, consumer confidence of urban Indians rose across all four indices - jobs, economy, personal investment and personal finances.

"The monthly PCSI, which is driven by the sum of the four weighted sub-indices, has surged across all the four indices," the report said.

While the PCSI employment confidence in jobs sub-index rose by 0.6 per cent over last month, the PCSI economic expectations sub index moved up by 4.7 per cent. The PCSI investment climate sub-index grew up by 3.6 per cent and the PCSI current personal financial conditions sub-index increased by 2.2 per cent. 

"We see recovery across all data points, so technically, the mood of the masses has lifted. It could be due to the Budget providing some perceptual relief - tax breaks; the focus needs to be on job creation and employment generation, for further reprieve," said Amit Adarkar, CEO, Ipsos India.

In the union Budget 2020, Finance Minister Nirmala Sitharaman had announced a new and simplified personal tax regime with revised income tax slabs and tax rates. "In this new personal income tax regime, income tax rates will be significantly reduced for the individuals who forgo certain exemptions and deductions," the FM had said.

The Refinitiv-Ipsos PCSI is a monthly national survey of consumer attitudes on the current and future state of local economies, personal finance situations, savings and confidence to make large investments. The index is composed of four sub-indices: current conditions index, expectations index, investment index and jobs index.