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Rural Economy: Auspicious signs have started coming from the rural areas for the Indian economy. The sales figures of MMCG, two wheeler companies for the fourth quarter of 2022-23 are very encouraging. Due to the increase in the production of Kharif crops, the income of the farmers has increased, and due to the increase in the income of the laborers associated with the agriculture sector, the demand in the rural areas has increased in the last few months, after which it is believed that the rural economy has started coming back on track. Is.
Demand for FMCG products increased in rural areas
According to FMCG companies, in 2023 the demand for FMCG goods has increased in rural areas. Due to the good Kharif crop, the income of the people in the rural areas has increased and the inflation has also come down in the last few months, after which people are spending more than before. Announcing the results of the fourth quarter of 2022-23, FMCG company Marico said that improvement is being seen in macro indicators. Commodity inflation has come down due to which the trend of consumption is looking better.
Better monsoon will boost rural economy
Rural sales account for more than one-third of the total sales of FMCG companies. Whereas for some companies in the sector, their total sales figure is close to 40 percent, which includes companies like Dabur, ITC and Parle Products. In the January to March quarter, there has been a jump of around 17 per cent in the sales of FMCG companies in rural areas. Whereas in the first three quarters of 2022-23, there was a decline in sales due to inflation. But now the trend seems to be changing. And according to the forecast of the Meteorological Department, if the monsoon is better this year, it can prove to be icing on the cake for the rural economy.
Increased demand for two wheelers and cars
Talking about two-wheelers, in the financial year ending March 31, 2023, the sales of two-wheelers have been 1.6 crore. There has been a jump of 20 percent in the registration of two wheelers in 2022-23. Whereas in 2020-21 and 2021-22 two wheelers sales saw a decline of up to 20 percent. Maruti Suzuki’s sales are increasing continuously in rural areas. The share of rural areas in Maruti’s car sales has increased to 44.4 per cent from 35.6 per cent last year. And this credit goes to the boom in the production of Kharif crops due to good monsoon last year, which has boosted the rural economy. Hero MotoCorp which sells 50 per cent of its two wheelers in rural areas. After announcing the results of the third quarter, the company had said that there are signs of increasing demand in rural areas.
Rise in demand for business loans
According to the report of Motilal Oswal, the demand for unsecured business loans has increased in rural areas and it is expected to increase further. Many financial institutions including FMCG are also offering overdraft on products like personal loan. Despite the increase in interest rates, no slowdown has been seen in the demand for loans.
El Nino can destroy the fleet
However, despite all these figures and positive factors, challenges remain. According to the monthly economic review report released by the Finance Ministry for the month of March, it has been warned of El Nino, due to which drought conditions may arise and agricultural production may decline. If this happens, inflation can increase, due to which the rural economy will also not remain untouched.
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