Winning Bizness Desk

Mumbai. There are some signs showing the Indian economy coming back on track in the rural areas. The sales figures of MMCG, two wheeler companies for the fourth quarter of 2022-23 are very encouraging.The increase in the production of Kharif crops has helped farmers increasing their income 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. According to FMCG companies, in 2023 the demand for FMCG goods will increase 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.

Sales also shot up in rural India

Rural sales account for more than one-third of the total sales of FMCG companies. 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. 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. Also, as per the report by Motilal Oswal, the demand for unsecured business loans has increased in rural areas and is expected to increase further. Many financial institutions including FMCG are also offering overdraft on products like personal loans. Despite the increase in interest rates, no slowdown has been seen in the demand for loans.

All depends on El Nino factor

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.