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LATEST NEWS UPDATES | Why rural India can't afford to buy biscuits -Roshan Kishore

Why rural India can't afford to buy biscuits -Roshan Kishore

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published Published on Aug 26, 2019   modified Modified on Aug 26, 2019
-Hindustan Times

Unfortunately, there is no high frequency income or consumption data for the Indian economy. What we do have is monthly data for rural wages, which is available until June 2019.

On Wednesday, media reports said that India’s leading biscuit-maker Parle Products Private Limited could cut up to 10,000 jobs as “slowing economic growth and falling demand in the rural heartland could cause production cuts”. The company’s flagship brand Parle-G is available in packs worth Rs 5, thus making is affordable to the poorest of consumers. To put this number in context, the daily average rural wage in India in June 2019 (latest available figure) was Rs 328.

To be sure, other high frequency indicators (simply, data available on a much higher frequency than, say, GDP or other macroeconomic parameters) such as passenger car sales have been pointing towards a slowdown in demand in the Indian economy for quite some time. Domestic sales of passenger cars have actually declined for 12 consecutive months beginning July 2018. India’s GDP growth has gone down for four consecutive quarters beginning June 2018.

However, there is an important difference between what Parle’s announcement of job cuts and decline in car sales or slowing GDP growth suggest. The last two do not necessarily suggest a squeeze on the poorest segments of society as the burden of a slowdown in economic activity can also impact the relatively well-off disproportionately.

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Hindustan Times, 23 August, 2019, https://www.hindustantimes.com/india-news/why-rural-india-can-t-afford-to-buy-biscuits/story-ytwoy8zBhiH7bZuoX7QOKM.html


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