Wednesday , June 23 2021

India’s rural demand seen ebbing in 2021-22, urban may come to the rescue

Rural demand, which has drived consumption growth and helped the economy remain afloat since 2018-19, may drop due to the falling prices of farm produce but urban demand is likely to pick up in the new financial year, according to a report.
Though rural demand outperformed in 2020, with the pandemic shock hurting urban India more, we see urban demand driving recovery in 2021, according to the report by Bank of America Securities.
Urban demand has on the wane since 2018 after the twin shocks of note ban and the hurriedly rolled out GST. Adding to the double whammy was the crisis in the non-banking financial sector, which has been one of the major drivers of consumption credit with the bankruptcy of IL&FS in September 2019 and the resultant risk aversion bank had developed.
The brokerage expects the autumn kharif farm income growth to slow to 7.4 per cent from 10.6 per cent last year, as lower pricing power offsets a larger crop. On the other hand, the summer rabi farm income growthRural demand, which has drived consumption growth and helped the economy remain afloat since 2018-19, may drop due to the falling prices of farm produce but urban demand is likely to pick up in the new financial year, according to a report.
Though rural demand outperformed in 2020, with the pandemic shock hurting urban India more, we see urban demand driving recovery in 2021, according to the report by Bank of America Securities.
Urban demand has on the wane since 2018 after the twin shocks of note ban and the hurriedly rolled out GST. Adding to the double whammy was the crisis in the non-banking financial sector, which has been one of the major drivers of consumption credit with the bankruptcy of IL&FS in September 2019 and the resultant risk aversion bank had developed.
The brokerage expects the autumn kharif farm income growth to slow to 7.4 per cent from 10.6 per cent last year, as lower pricing power offsets a larger crop. On the other hand, the summer rabi farm income growthRead More

About

Check Also

EC can hold Bengal by-polls as Covid-19 situation is under control: Mamata

West Bengal chief minister Mamata Banerjee on Wednesday said bypolls, due in six assembly seats …

Leave a Reply

Your email address will not be published. Required fields are marked *