Rural demand keep growing while Urban demand slumps and Economy will grow at 6.5 percent says Finance Ministry Report

Economic surveys data presented and several key indicators mentioned for the first half of the financial year 2024-25, as Finance ministry released September Monthly Economic Review 2024 this Month. It outlooks Indian economy is good and will grow at between 6.5 to 7.0 percent in current year.

Report states that rural demand continuously improving, as Fast Moving Consumer Goods (FMCG) volume sales increases and a rise in three-wheeler and tractor sales. Where as urban consumer demand declines.

Rural demand continues to strengthen, and Supported by above-normal monsoon boosting Kharif sowing, an increase in Minimum Support Price (MSP) for Kharif crops, and Government initiatives like increased allocation for Mahatma Gandhi National Rural Employment Guarantee Scheme Says Report. The improvement in rural demand is reflected in rising FMCG sales.

Urban demand appears to moderate due to softening consumer sentiments, limited footfall due to above-normal rainfall, and seasonal periods during which people tend to refrain from new purchases.

Vehicle sales from rural areas seen positive growth in first half of Financial Year 2024-25. Where as in Urban area the Auto sales decreased by 2.3 percent including tractor and 3-wheeler sales decline by above 5 and 10 percent.

Report also states that India’s external debt to GDP ratio remains constant. Having 700 billion USD forex reserves is a good sign as it is one of top four nations having highest forex reserves. The buffer of forex reserves will help insulate the domestic economy from global shocks.