/
•
•
Context is everything.
Detailed stories on technology startups, business and economic current affairs.
Detailed stories on technology startups, business and economic current affairs.
Editor's note: It’s been a bad spell of news for the Indian economy. First the slowdown of 2019, one of the worst in decades. And in this year, the COVID-19 pandemic that has taken a hammer to businesses and livelihoods across the world. Over the past month or so, though, some industry leaders have proclaimed that a recent uptick in indicators such as tractor sales as a sign of imagined growth in the agricultural sector, a harbinger of better times for rural India—“Bharat”—and all of the country. However, the economic linkages of adjacent and allied sectors are more complex, and we really can’t make predictions of any sort of recovery based on simple facts right now. It’s worth going into in a little more depth to understand just why. What’s in a tractor? First off, tractor sales are correlated with agricultural output, but do not imply agricultural recovery. Pawan Goenka, managing director of tractor and SUV maker Mahindra & Mahindra Ltd, has pointed out that tractor sales in June 2020 were better than in the same month a year earlier. He emphasized …
Editor's note: It’s been a bad spell of news for the Indian economy. First the slowdown of 2019, one of the worst in decades. And in this year, the COVID-19 pandemic that has taken a hammer to businesses and livelihoods across the world. Over the past month or so, though, some industry leaders have proclaimed that a recent uptick in indicators such as tractor sales as a sign of imagined growth in the agricultural sector, a harbinger of better times for rural India—“Bharat”—and all of the country. However, the economic linkages of adjacent and allied sectors are more complex, and we really can’t make predictions of any sort of recovery based on simple facts right now. It’s worth going into in a little more depth to understand just why. What’s in a tractor? First off, tractor sales are correlated with agricultural output, but do not imply agricultural recovery. Pawan Goenka, managing director of tractor and SUV maker Mahindra & Mahindra Ltd, has pointed out that tractor sales in June 2020 were better than in the same month a year earlier. He emphasized …
Though the war in the Gulf is pinching the Indian economy, things aren’t too bad. But much needs to be done if the situation drags on or worsens, rather than waiting for it to come to pass.
How well rural consumption is doing is subjective. What isn’t subjective is how growing indebtedness, combined with stagnant income growth, is creating a tinderbox for households, banks and consumer companies that no one is talking about.
Stagnant wages and job growth are straining the economy. The government’s hyped tax breaks can do little to fix what is fundamentally wrong with demand.
Though the war in the Gulf is pinching the Indian economy, things aren’t too bad. But much needs to be done if the situation drags on or worsens, rather than waiting for it to come to pass.
How well rural consumption is doing is subjective. What isn’t subjective is how growing indebtedness, combined with stagnant income growth, is creating a tinderbox for households, banks and consumer companies that no one is talking about.
Stagnant wages and job growth are straining the economy. The government’s hyped tax breaks can do little to fix what is fundamentally wrong with demand.
