India Investment, Stocks, Credit Card and Retail Forum
Investments in Indian Equity and Research => Indian Economy, Macro, RBI Policies => Topic started by: komal on August 28, 2012, 12:46:10 PM
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The ongoing drought should reinforce that rural demand will slow in 2H12. It is not as if rural discretionary spending will collapse. Still, the push from rural India that drove consumption is fading away for now.
Analysts estimate that farm income will slow to 5.5% in the coming autumn kharif harvest and 11.3% in the summer rabi harvest gone by, from 15% in 2011-12.
Raw cotton farmers will likely see a contraction in income. Rice farmers will also see their earnings decelerate. Pulses and oil seed farmers, however, should actually see higher income, given greater pricing power due to chronic excess demand.
Rural demand in 1H13 will be driven by the rains we get in the northwest in September, as the Indus, which waters north India's wheat fields, is running abysmally low, at 27.1% below normal.