Rural consumption increased by only 4.6% in the last quarter, this is 2% less

Rural consumption is slowing down. This is indicated by the slowest growth in two-wheeler sales in 27 months in the December quarter. During April-December 2022, the biggest reason for this was the increase in the price of the produce by only 9% as against the increase in the cost of farming by 24%.
According to a report by Motilal Oswal Financial Services, meanwhile, farm income grew just 1% and non-farm wages continued to decline. According to the report named EcoScope, rural consumption grew by 4.6% in the third quarter. This increase was 5.5% in the first quarter and 6.5% in the second quarter. Due to inflation, more was spent on fewer things.

Four major reasons for the slowness in rural consumption: -

1- Four-quarter slowest growth in real farm income
2- Decrease in income from farm trade for 8 consecutive quarters till December
3- Real agricultural exports decline for the first time in 10 quarters
4- Real farm credit declines to a 3-quarter low

Real farm wages in the country grew by only about 1% in the October-December quarter. It is a matter of relief that before this there was a decline in agricultural wages for three consecutive quarters.
Between April-December 2022, the government increased government spending on the rural sector by 13.4%. But there was a 9.9% decline in government spending on the rural economy in April-December 2021.
The farmer is spending more than his income on essential items for farming. Between April 2022 and January 2023, expenditure on inputs such as diesel, fertilizers, pesticides, machinery such as tractors, and electricity increased by 24%. Against this, the prices of agricultural products increased by 9%. Rural spending grew by 5.3% in the first 9 months of the current financial year. In the first 9 months of the last financial year, this expenditure had increased by only 0.6%.