Key Points
The RBI governor, in copybook central banker mode, has duly pointed to a systemic risk routinely discounted by large commercial banks: high levels of staff attrition..
The buoyancy over GDP growth data for the second quarter of 2023-24 glosses over stagnating rural demand, which has impacted the second-quarter financial results of most leading consumer products companies..
For example, the media release issued by FMCG company ITC Ltd states: Consumption demand has been relatively subdued especially in the value segment and rural markets on the back of sub-par monsoons and persistent food inflation which saw a sharp spike during the quarter.".
Market research agency Kantars FMCG pulse report for September shows that consumption of FMCG products in rural areas continues to trail urban areas: volume growth (in moving annual terms) for rural areas was only 2.8% compared with 6.1% for urban areas..
However, RBIs October bulletin sees it differentlyRural consumers also appear to be ready to join the party"and claims that joblessness fell in September, even though its high-frequency indicators for rural areas shows incipient signs of stress..
