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Demand indicators suggest rural areas recovering faster than urban, say experts

Updated : June 24, 2020 12:36 PM IST

Mahindra and Mahindra (M&M) has seen tractor demand surge in rural markets. To find out if the spread of the economic recovery is better in rural areas compared to urban India, CNBC-TV18 spoke to Rajesh Jejurikar, executive director - auto & farm sectors, M&M, Dr Samiran Chakraborty, chief economist at Citi and Prasun Basu, South Asia zone president at Nielsen.

“Tractor demand, on a seasonally adjusted basis, has come back to pre-COVID levels whereas if you look at the urban side, we don’t see these indicators coming back to even 60-70 percent of pre-COVID barring electricity and railway freight, which is up to about 90 percent,” said Chakraborty.

“Tractor demand is very robust and several factors are driving that. Automotive clearly is going to see a slower movement in demand than what we are seeing in rural, especially in urban India. In many parts of the country we are seeing automotive demand come back and the reason for that clearly seems to be a desire to own a personal mobility option,” Jejurikar added.

According to Basu, North India is bouncing back faster due to higher rural areas while Western India is the slowest to bounce back. Rajasthan and Uttar Pradesh are back to 90% of the pre-COVID sales while Gujarat and Maharashtra are at 60% of the pre-COVID levels, Basu added.
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