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Slowdown hitting across

all sections of economy but

growth sparks remain

ll PSU banks, infra, auto, en- Second time ever in Independent vestment and muted exports were some
ergy, FMCG, metal, and phar- India’s history, a government reasons for the slowdown.
ma indices have gained at
bourses in recent times but with a clear majority has FMCG sector
A data points to an economic returned to power consecutively The March quarter result of India’s
slowdown across sectors. The Society of FMCG companies was one of the first
Indian Automobile Manufacturers has for another term. The stock signs of stress. Hindustan Unilever’s vol-
reported Domestic sales of cars, com- market has given the mandate ume growth was 7 per cent, a worrying
mercial vehicles and two-wheelers in a thumbs-up but a slowdown dip from the comfortable double-digit
April down vis-à-vis corresponding peri- growth it had recorded in the preced-
od last year. The decline of almost 16 per- is hitting across all sections of ing five quarters. Dabur India reported
cent in total automobile industry sales Indian economy, writes suMan a growth of only 4 per cent while Godrej
is an indication that consumer demand Consumer Products’ domestic branded
across markets urban and rural, institu- business volumes barely grew at 1 per
tional and individual across length and in March 2019 from the 14.1 per cent pace cent. According to Nielsen data, the
breadth of the country is melting down. in March 2018. growth in the FMCG sector slowed to 13.6
Car sales were down 20 per cent and Correspondingly, the manufacturing, per cent in the first three months of 2019,
there is no stimulus to jack up the sales. which has a weight of almost 78 per cent compared to almost 16 per cent growth
In 2018-2019, the annual industry sales in the index, continues to slow down. recorded in the last three months of 2018.
growth was a positive 2.70 per cent, but Overall, the sector’s growth slowed to 3.5 Economic data for the fourth quarter will
10 out of the 17 companies that compete per cent in 2018-19. be out by the first week of June 2019 and
for space on India’s roads posted nega- The new government after May 23 most experts say that growth will be be-
tive sales growth. In April 2019, the auto- would have its task ready to repair the tween 6 per cent and 6.5 per cent.
mobile industry recorded its worst ever- economy. India’s consumers are spend- Rathin Roy, a member of the Prime
monthly sales fall in nearly eight years. ing less on everything from toothpaste to Minister Economic Advisory Council, re-
According to data put out by the Soci- automobiles, sparking fears of a growth cently sparked debate when he warned
ety of Indian Automobile Manufacturers, slowdown. In fact the last six months that India could be headed for a “struc-
passenger vehicle sales slumped to 2.47 have seen weak demand and lower sales tural crisis” if the demand created by
lakh in April 2019 versus 2.98 lakh in the growth in key sectors. The recent crisis in the 100-million or so people who sit at
same month last year, a fall of 17 per cent. the aviation sector has put the brakes on the top of the country’s socio-economic
The huge hike in insurance costs from passenger traffic growth. pyramid has begun to exhaust itself. We
September has also gone against the An assessment by State Bank of In- are heading for a structural slowdown.
sales acceleration. dia’s research wing has noted that out This is an early warning”. He further
of 384 companies, more than 330 exhib- said that “It means, in short, we will not
The downtrend ited “negative growth in mid-line and be South Korea. We will not be China.
Similarly, the Index of Industrial Produc- bottom-line” in 2018-19. The Finance We will be in Brazil. We will be in South
tion for March shows that output fell to Ministry too admitted that economic Africa. We will be a middle-income
a 21-month low. The capital goods sector growth had cooled slightly in 2018-19. country with large numbers of people in
shrank by 8.7 per cent in April and 8.9 per The Finance ministry’s department of poverty seeing rising crimes. In the his-
cent in March. The output of consumer economic affairs said in a report titled tory of the world, countries have avoided
durables fell 5.1 per cent from a year ‘Monthly Economic Report’ for March the middle-income trap but no country
earlier, and growth in consumer non- 2019 that a declining growth of private once in it, has been able to get out of this.”
durables production slid to 0.3 per cent consumption, weak increase in fixed in- In fact, almost every macro and the

Tehelka / 30 june 2019 26 www.Tehelka.com