After two slow years, rural markets are seeing a resurgence in demand that leaves the urban economy in the dust
WHEN the Narendra Modi government announced the demonetisation of Rs 500 and Rs 1000 notes on November 8, 2016, the Indian rural sector, which was primarily a cash economy, was the worst sufferer. Coming at the end of two years of subdued rural consumption, this hit the sector badly and stymied whatever growth it was seeing. Demand was at its lowest ebb and there was hardly any consumption happening as cash dried up.
A year later, India’s massive rural sector has hit back. In the last two quarters, there has been handsome growth in consumption and demand, and there are signs that this will continue well onto the next financial year. While companies have registered an overall growth of five to ten percent, their rural growth has been in double digits and in the range of 12-15 percent.
Consumer durable companies, fast-moving consumer goods (FMCG) firms and automotive manufacturers have all seen robust double-digit growth in rural areas riding on a sound rural push that has happened in the last several months. This compares favourably to the low single-digit figures for urban areas where growth, if there is any at all, is stagnating. There are clear signs of a rural recovery across the economy.
Demonetisation had dealt a body blow to many industries that had a rural focus. FMCG, which is primarily cash based, saw flat to negative growth in December 2016. Hindustan Unilever Limited (HUL), India’s biggest FMCG company, saw flat growth in December 2016 and low single-digit growth in the following couple of months. According to HUL CEO Sanjiv Mehta, demonetisation was one of the reasons behind the slow growth in rural areas.
Esta historia es de la edición December 18, 2017 de Outlook.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 8500 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición December 18, 2017 de Outlook.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 8500 revistas y periódicos.
Ya eres suscriptor? Conectar
Dera, Drugs And Despair
Punjab poll pitch is seeing interesting twists and turns this election season
Allure Of Hatefulness Beyond Hate Speech
Polarisation between the Hindus and the Muslims is an unappetising reality, an ugliness that will not go away even after the votes get counted
Shine Off Sonar Bangla
Since the ant displacement movements against the Left Front government in 2006-08, Bengal has seen increased corruption, communalisation of politics and the rise of welfarism
Carnatic Cauldron
For the BJP-led NDA, 400 paar will remain a dream if the South Indian states choose to look the other way
The Young & the Restless
A new crop of young Dalit leaders shine in Uttar Pradesh's political Armament
In The Name Of Ram
For the people of Hazaribagh, famous for its Ram Navamii, life is a tussle between peace, processions and politics
Shell Company?
The power play between the BJP and the BJD in Odisha appears to be an electoral gimmick. Post elections, they may have each other's back
Peak Season in the Pir Panjal
Politicians excel at stirring up emotions at election time, and Kashmiris are torn between responding with cries or slogans
Seeds of Betrayal
Forget about doubling their income, Haryana's farmers are living a life in penury
Capital Contest
Could an alliance of former foes prevent a hat-trick for the BJP in Delhi?