From small businesses to farmers, here's how middle India is driving demand Farmers, benefiting from a bumper crop, are lapping up tractors while demand for personal vehicles, due to a lack of public transport and the need for safer travel options, has boosted sales of cars and motorcycles
November 29, 2020 / 09:05 PM IST
Government data released on Friday showed the economy shrank 7.5 percent in the July-September quarter, performing better than analysts' expectation of an 8.8 percent contraction as lockdowns were eased and some pent-up demand was met. In the April-June period, the economy shrank 23.9 percent.
Annual growth of 3.4 percent in farm sector and 0.6 percent in manufacturing during the September quarter has raised hopes of an early recovery and some service sectors such as trade, hotels and transport contracted at a much slower pace compared with the April-June period. (Source: Reuters, Image Source: Wikicommons)
Trade, hotel, transport, communication & services related to broadcasting reported a contraction of 15.6 percent in the September quarter, against a contraction of 47 percent in the previous quarter.
Farmers, benefiting from a bumper crop, are lapping up tractors while demand for personal vehicles, due to a lack of public transport and the need for safer travel options, has boosted sales of cars and motorcycles. (Source: Reuters)
Maruti Suzuki, India's biggest carmaker, had a 10 percent growth in rural sales between July and September versus a 4 percent rise overall, led by small, entry-level models, said Shashank Srivastava, executive director, marketing and sales. (Source: Reuters)
There has also been an uptick in goods and services, tax collections, and higher energy consumption. (Source: Reuters)
Increased demand for air travel and hotel stays by small business owners, accompanied by a rise in rural incomes and spending after two good monsoons, is also helping the COVID-19 pandemic-hit Indian economy slowly recover. (Source: Reuters)
Since the end of May, when the government lifted a ban on flights, monthly domestic passenger traffic has more than doubled from 2 million in June to over 5 million in October. But that is still down from about 12 million a year ago. India's biggest carrier IndiGo and rival Vistara are seeing an uptick in business travel but to a much smaller extent than before. (Source: Reuters)
Much of it is from small and medium enterprises (SMEs) or small business owners. SMEs have contributed to a 35 percent to 40 percent recovery in hotel bookings compared with pre-COVID times and between 27 percent and 32 percent recovery in flights, according to online travel agency MakeMyTrip. (Source: Reuters)