The year has begun with some somber news from companies servicing rural markets. Escorts tractor sales in December is down 39 percent from year ago levels; Mahindra and Mahindra’s (M&M) tractor sales have fallen by 19 percent year on year; in fact tractor sales have been slowing for several companies since October itself. Hero Motocorp, which also depend heavily on rural consumption has posted a 12 percent lower December sales.

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In fact a similar warning came from fast moving consumer goods (FMCG) companies after their second quarter results. Neilsen said that rural consumption which was growing at 14 percent in the January, February and March quarter slipped to 9.4 percent in the July, August, September quarter. However, the December numbers look far more worrying. Ramesh Chand, Agri Economist at NITI Aayog, Devendra Pant, Chief Economist at India Ratings and Sachchidanand Shukla, Chief Economist at Mahindra Group discussed what ails rural consumption.

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For the entire discussion, watch the accompanying video.

First Published:Jan 3, 2022 4:49 PM IST