Optimistic Consumption Trends in India, Agriculture Growth Shines: New Report
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New Delhi, Dec 9 (NationPress) The Reserve Bank of India’s (RBI) consumer confidence in November has shown an optimistic outlook for the future. On the rural front, agriculture growth continues to be a bright spot, registering a robust growth of 4 percent in the second quarter (Q2) of this fiscal year (FY25), according to a report released on Monday.
The private final consumption expenditure (PFCE) growth experienced a modest increase to 6 percent in Q2 FY25, a significant rise from the 2.6 percent growth recorded in Q2 FY24, as stated in a report by Bank of Baroda (BoB).
The report highlighted, "There are mixed signals regarding the overall consumption landscape, evidenced by a rise in electronic imports. The RBI's consumer confidence index in November 2024 indicates a more hopeful future.”
Focusing on rural areas, agriculture continues to shine, with a growth rate of 4 percent during the July-September period, compared to 1.7 percent in the same timeframe of the previous fiscal year.
According to the report, "Rabi sowing has surpassed last year’s figures due to favorable soil conditions and improved reservoir levels.”
The area designated for Rabi crop sowing this season has expanded to 428.28 lakh hectares (as of December 2), up from 411.8 lakh hectares. This increase in sown area is promising, as it is likely to lead to higher food production and stimulate growth.
In a recent Monetary Policy Committee (MPC) meeting, the central bank decided to cut the cash reserve ratio (CRR) by 50 basis points, which is projected to infuse over Rs 1.16 lakh crore into the economy.
BoB's report further mentioned, "We anticipate the commencement of an easing cycle of 25 basis points starting February 2025.” India’s GDP growth for Q2 FY25 has moderated to 5.4 percent, yet a rebound is expected in the latter half of FY25, fueled by an increase in government expenditure.
“Consumer spending is also predicted to rise, supported by rural expenditure and the ongoing wedding season,” the report concluded.
