30 September, 2020

The Farmers’ Bull Market

After two slow years, rural markets are seeing a resurgence in demand that leaves the urban economy in the dust

Not Just Browsing
A showroom in a village on Lucknow’s outskirts
The Farmers’ Bull Market

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 per cent, their rural growth has been in double digits and in the range of 12-15 per cent.

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...



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