Daily Briefing: Decoding trends in rural, urban demands in Indian economy; preps underway for Census next year

With that, let’s move on to today’s edition:

• Census next year, delimitation soon after
• Karnataka okays internal quota in SC communities
• Ageing Kohli’s twilight phase

🚨 Big Story

“In the fourth year of economic recovery…several growth indicators show continuing momentum while some show signs of softening.”

The Union Finance Ministry released its monthly economic report for September on Monday. Based on performance of various indicators during the first half of the current fiscal, here’s all we know about the momentum of our GDP growth:

‘Continues to strengthen’: Rural demand saw an uptick – with a 5.2% growth in volume terms in Q1 which is higher than the 4% growth in the corresponding quarter of the previous year. Now, this improvement was reflected in an increase in minimum support price (MSP) for kharif crops, increasing fast moving consumer goods (FMCG) volume sales, and a rise in three-wheeler and tractor sales.

New points of concern: A slowdown in urban demand – including high food inflation and a moderation in credit growth – are possible headwinds that could slow down growth in the second quarter of 2024-25.

The signs, as per the report:

• Urban FMCG sales moderated from 10.1% in Q1 of FY24 to 2.8% in Q1 of FY25.
• As per FADA, auto sales declined by 2.3% in H1 of FY25, mainly due to the lower sales in Q2 of FY25 compared to Q2 of FY24 in urban areas.
• Housing sales and launches also dipped in Q2 of FY25
• Fall in sales of commercial vehicles and tractors in H1 (first half of year)

‘Softening consumer sentiments’: These trends, as per the report, may be due to softening consumer sentiments, limited footfall due to above-normal rainfall, and seasonal periods during which people tend to refrain from new purchases. While the ongoing festive season is expected to improve matters, however, the ministry added, “early indications were not particularly promising.”

Analysts’ POV: Government spending that had dipped during the election months is likely to pick up as that is overdue, experts highlight. The positives going forward include the festive season demand, and to what extent discounts help boost consumer activity. It would also be crucial to see to what extent government capex picks up and if rural demand will hold, they add.

P.S. The Ministry economists maintain that the Indian economy will grow 6.5-7% in the current fiscal.

⚡ Only in Express

“A convenient alibi, a source of distraction for election monitoring and disruption of routine governmental activity.”

In his latest column Deshkaal, Yogendra Yadav argues that Model Code of Conduct (MCC)–guidelines issued by the Election Commission of India (ECI) to regulate political parties and candidates prior to elections – must be junked. He also blames the poll body “for reducing this democratic innovation to a farce”.

📰 From the Front Page

Better late than never? The Centre is finally preparing to conduct the much-delayed Census which it could not carry out in 2021 because of the Covid-19 pandemic. The process is set to begin next year and be completed by 2026, The Indian Express has learnt. Suggestions are also being taken on whether caste enumeration would be part of the exercise. Delimitation for redrafting of constituencies and the rolling out of women’s reservation — the two other exercises linked to the Census are to follow.

India’s Census which has happened in the first year of every decade since it was first held in 1881 is a two-step process involving a house-listing and numbering exercise, followed by population enumeration. The year 2021 marked the first time it missed its decadal schedule. Amitabh Sinha explains all possible angles of the next Census.

‘Total success’: Just days after Prime Minister Narendra Modi and Chinese President Xi Jinping held bilateral talks on the sidelines of the BRICS Summit in Russia, Russian Ambassador Denis Alipov emphasised that the two countries need to speak in “one voice” for “holistic development and unity around the world.” Hailing the Summit, further, Alipov said that it was a “total success”. “BRICS is not anti-West but non-West,” he added.

📌 Must Read

Political instability at play: Japan is facing a misery that seems too tangled to be solved with ease. Besides facing economic headwinds and a tense security situation, Japan has now met with another political crisis as voters in the country have punished Prime Minister Shigeru Ishiba’s ruling coalition, leaving no party with a clear mandate to lead the world’s fourth-largest economy.

‘All is well’: As the Sangh Parivar’s efforts resulted in BJP’s big boost in Maharashtra ahead of elections and a hat-trick in Haryana, the “mutual dependence” between the BJP and RSS is affirmed (of course, with some wrinkles still requiring to be ironed out). Will BJP make similar gains in upcoming Assembly polls in Maharashtra and Jharkhand?

Back to reservations: The Karnataka government has agreed to implement internal reservations for Scheduled Caste (SC) communities, and formed a one-man commission to ‘compile data’ and take further steps. While this puts the spotlight back on need for empirical data, we take a look at how it will be done.

⏳ And Finally…

Even the greatest have not been immune to the vagaries of time. Maybe the time has arrived for 35-year-old Virat Kohli: “when he [Kohli] is past his prime, yet not fully undiminished, or reached a zone where he has become a burden for the team. There are still hundreds to be scored and battles to be won. It’s a stage of refusal, when a sportsman cannot reconcile with the reality that he is ageing. He still longs to contribute the way he once used to be, but cannot quite come to terms with the reality he doesn’t, and the stage is no longer his.”

In today’s episode of our 3 Things podcast, we delve upon the violence in Chhattisgarh’s Hasdeo forest last week, the mining issue, and reactions to the same. We also discuss how corneal damage is one of the major causes behind blindness in India, alongside talking about loss of funds in cyber crime cases in India.

That’s all for today.

Until tomorrow
Vibha B Madhava and Ariba

Business As Usual by E P Unny