Rural demand picks up as consumer optimism holds steady, RBI’s bulletin says

Sanjay Malhotra, Governor, Reserve Bank of India

India’s rural demand is showing signs of revival, supported by a robust performance in the agricultural sector, according to the Reserve Bank of India’s latest bulletin.

The report, which comes amid broader hopes of a consumption-led recovery, notes that high-frequency indicators for May point to an uptick in rural activity.

The section has been prepared under the guidance of RBI Deputy Governor Poonam Gupta, marking a shift in authorship from her predecessor Michael Patra, who previously helmed the section.

Gupta, along with other contributors, has provided key inputs in this month’s edition, which closely analyses current macroeconomic conditions and forward-looking trends.

“High-frequency indicators of aggregate demand for May suggested a pick-up in rural demand, especially given the strong performance of the agricultural sector,” the report noted, reflecting improving conditions in the country’s hinterland after months of uneven recovery.

In addition, the central bank highlighted a positive trend in consumer sentiment surveys. While current consumer confidence remains stable, there is a noticeable improvement in optimism about future prospects, the RBI said.