Rising rural demand pushing pvt consumption up
Possible normal monsoon, moderating inflation will further drive rural demand: India Ratings
image for illustrative purpose
New Delhi: Driven by rural demand recovery owing to normal monsoon and moderating inflation, India is projected to see a surge in private consumption in the current fiscal, a report said.According to India Ratings and Research, the rise in private consumption would lead to more balanced growth, reducing the disparity between premium and value segments.According to the report, urban demand will also continue to grow, but at a slower pace.
The growth disparity would moderate in FY25, exhibiting slightly more broad-based growth contours, said India Ratings.There has been a constant rise in rural consumption demand in recent years.
Riding on a revival in rural demand and steady urban growth, the fast-moving consumer goods (FMCG) sector in India is also projected to see a revenue growth of 7-9 per cent this fiscal.
According to a recent Crisil Ratings’ study of 77 FMCG companies, “we expect volume growth of 6-7 per cent in fiscal 2025 from the rural consumers (40% of overall revenue), supported by expectation of better monsoon benefitting agricultural production, and hike in minimum support price supporting farm incomes.
According to the report, higher government spending on rural infrastructure, primarily through Pradhan Mantri Awaas Yojana-Grameen (PMAY-G) for affordable houses, will aid higher savings in rural India, supporting their ability to spend more.
On the other hand, according to the Crisil report, volume growth from urban consumers will remain steady at 7-8 per cent during fiscal 2025 supported by rising disposable incomes and continued focus on premium offerings by the players, especially in the personal care and home care segments.
The food and beverages (F&B) segment is expected to grow 8-9 per cent this fiscal, aided by improving rural demand.
