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Tractor Sales In India Plunges For Fourth Consecutive Month In May

Auto News - Published on Mon, 17 Jun 2019

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Signaling no relief to rural woes, tractor sales continue to decline in double digits in May 2019. According to a report released by industry body, tractor's domestic sales dropped by about 16% in May FY'20 to 58,091 units from 68,901 units in the last fiscal, while the production slipped by 18% at 65,133 units. This is the fourth consecutive decline in monthly sales this year. Analysts pointed out the distress in rural-economy are mainly due to persistent decline in minimum support price of cash crops. Besides this, the non-farm income, which accounts for about 40% of the total agri household income, has also dried up mainly due to slowdown in infrastructure activities in the preceding months of general elections. Infrastructure activity is always directly linked to rural prosperity as it not only creates jobs but also boost rural economy.

Farm output too remained below expectation due to lack of rainfall in western and southern India. This combined with high lending rates of NBFC's is and low pre-monsoon rainfall during March to May halted new tractor purchases. As per the records of the India Meteorological Department, India received 23% below the normal rainfall during this time of the year.

However, the weather forecast agency estimates that the country will receive below-average monsoon in June but will pick up in August and September. This may lead to revival in demand in the beginning of Q2 FY'20.

The industry pins hope on the upcoming union budget to strengthen rural income. Industry leaders demand that government should focus on increasing farmers' income by promoting food processing and farm exports besides addressing certain taxation issue. The newly elected NDA government will present union budget on July 5.

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Posted By : Mohan Sharma on Mon, 17 Jun 2019
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