The absence of demand pervades almost every key sector: from consumer durables to biscuits and housing. Rural growth rates — which were almost double those in urban areas earlier — have eased to the point where they are now almost at par with those in urban areas, according to HUL’s first-quarter results statement. And it is not just consumer goods makers that are hurting from lack of rural consumption. “Rural wage growth was lower at 3-4% [last year] compared with an average 6% in the preceding two fiscals,” the ratings firm’s research group wrote. Consumer sentiment is a key ingredient affecting consumption and it is vital for policy makers to address weakness in consumer sentiment through a mix of measures in the economic realm, both monetary and fiscal, as well as ensuring a congenial socio-political climate that enhances the ‘feel-good’ factor.

Source: The Hindu September 28, 2019 18:32 UTC