New Delhi: A number of recent revelations point to continuing distress in the Indian economy, particularly for those in rural areas and belonging to lower income groups.
Livemint has reported that the small car segment saw a record decrease in its share of passenger vehicle sales during the second quarter of this financial year. Higher end cars, like SUVs and MUVs, however, saw a relative increase in demand, and amounted to 60% of all vehicle sales in September.
“This trend also points to an uneven income recovery at the bottom of the pyramid in the aftermath of the Covid-19 pandemic,” the newspaper said. What is noteworthy is that small cars in the second quarter of FY24 were 75% lower than the pre-pandemic peak of 2018-19.
The sale of entry-level motorcycles too dropped to its lowest point at 1.4 million units. This is 39% less than the peak in Q2 of 2018-19.
In another marker of continuing distress, particularly in rural and semiurban areas, gold loan companies are facing a surge in demand ahead of the festive season, Economic Times reported. A gold loan is a cash loan provided with gold being the collateral.
While one explanation could be that people are wanting to spend more this festive season as the COVID-19 pandemic has eased, the rush for loans suggests their incomes are not able to provide enough liquidity. “The erratic monsoon in some parts of the country may have also dented rural incomes, forcing people to borrow against their gold,” the newspaper stated.